Oct. 16, 2012
-- According to the Investing Ninja, the reason investors think long-term dividend investing is boring and dull is because the companies that pay solid dividends year after year often only pay dividends at 5% to 10% annually. The perception became that this is not really a lucrative strategy and generated no short term excitement. The “Building a Sexy Dividend Portfolio” describes a strategy to spice up long term dividend investing and this strategy can be used on the vast majority of companies, even ones that have been paying dividends for many years.
The sexy dividend strategy involves choosing companies from the free Aristocratic Dividends report available on the Investing Ninja website. This report allows the investor to quickly and easily choose companies that have different payable months throughout the year. Doing this reduces the number of companies available and it diversifies a portfolio so that the investor is setting up for a sustained monthly stream of income. The second part of the strategy involves choosing companies in specific industries so the investor is not over exposed in one particular group of industries that might lead to negative impacts during an economic downturn. So in summary, the strategy is very simple. The investor just picks the month they want to receive dividend payments, determines the industry to focus on and then compares companies according to the year-over-year dividend growth.
What makes this strategy go from obvious to sexy is the next step. After collecting the dividends, the investor then sells calls to generate more funds to reinvest in more shares of the dividend stock. This fuels the strategy and takes it to a truly sexy level. The overall goal of the strategy is to collect enough premiums from selling calls to equal at least the total amount of the dividends received by the investor. The strategy depends on selling calls that are higher than the current price but not so high that the investor doesn’t collect enough premiums to justify selling the call in the first place.
So far, the “Building a Sexy Dividend Portfolio” has set out the foundation of a strategy to juice up any investor’s long term dividend portfolio and there is more to come The writer plans regular postings to further develop the strategy and get investors on their way to the best long term dividend portfolio possible.
Those interested in learning more about the innovative “Building a Sexy Dividend Portfolio” can visit the InvestingNinja.com website and get started on their long term dividend investing strategy today.