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Author: blesto Big red star, 1000 posts Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 27821  
Subject: Re: Dividend paying stocks Date: 6/23/2014 8:41 PM
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That's why you try to invest in the quality companies that pay divi's. Over time the value of the stock should rise and hopefully the divi's with it. Drip investing should be viewed for the long term. What happens this next payout shouldn't afffect how you see the company long term.

Of course there may be a drastic dip in the share price and if it's only due to a market panic as opposed to the company's long term prospects then it's time to load up more. The last market panic in '08 was a great opportunity for those who stood fast and were willing to plunk down more cash into equities. Albeit some cut the divi's and it was a dificult time and I fully expect another 15% drop or more in the future, but over the long term horizon it is just another blip on the radar.

Drip drip drip drip...
is about building wealth slowly and letting compound interest do it's work. That's why it's important for younger people to start as soon as possible cuz the time for compounding is on their side.

Drip drip drip drip...

I'm not a millionaire (yet) but I'm way better off in my earnings from the market than your average joe. Being able to add a little here and there plus the compounding of my reinvested divi's has put me in a way more comfortable position for retirement than those who worry about the ex-dividend drop for that quarter who doesn't invest or reinvest anything.

Here's another little example. When Tom Gardner started the million dollar portfolio news letter service he started it just before that '08 crash. He put a million dollars of the Fool's money on the line to invest in the market with what that portfolio service bought. That last crash in '08 put the port well below that million dollars. Tom took a lot of grief for it, but today that port is outperforming the S&P and is well back over a million dollars today. Tom's long term goal for that port is to reach a billion. I think it will happen in my lifetime.

Drip drip drip drip...

The power of compounding is the secret sauce of Drip investing.

Drip drip drip drip...
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