Sunday, March 3, 2013

Eliminating Bad Investing Habits with Dividend Investing

Dividend Growth Investing is my preferred investment strategy. I?ve used this strategy extensively to build up my own dividend income stream over the years. However even more beneficial than the passive dividend income which I have been able to accumulate, a focus on dividends has enabled me to reduce several bad investing habits. ?

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Avoiding buying high and selling low

Negative reactions from Mr Market typically send investors scurrying for the exits. During the depths of the declines in 2009, investors were abandoning stocks and heading for the safety of bonds and cash. Dividend stocks were not spared during the declines.

Dividend stocks were not spared during the declines. Many of the most stable dividend payers, such as The Coca Cola Company (KO) and Colgate Palmolive (CL), also experienced significant declines. Coca Cola fell almost 25% during 2008, while Colgate Palmolive was down some 10%.

The declines in the stock prices of both companies were not indicative of any problem in either of the underlying businesses.?The operating cash flow of both Coca Cola and Colgate Palmolive actually increased during the 2008-2009 period. In Coca-Cola?s case, operating cash flow increased 8% between 2008 and 2009, while for Colgate operating cash flow increased almost 45%.

If you are interested in reading ?more of my article you can find a link to it here at Seeking Alpha.

Source: http://www.financiallyintegrated.com/investing/eliminating-bad-investing-habits-with-dividend-investing/

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