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The Great Myth About Big Yields

Phoenix Capital Research's picture


One of the biggest mistakes investors make when it comes to dividend investing is assuming that BIG dividends= GREAT dividends.


Dividends are paid based on cash flow. A company can sometimes pay out a dividend through financial innovation (issuing shares as dividends, etc.), but if you are looking for REAL income from your investments, you NEED the company to be producing CASH.


No cash= no dividends= no yield.


This is why dividend investing is a tricky business. You cannot simply assume that because a company paid out a big dividend before, that it will continue to do so. You need to assess the stability of its cash flows… as well as its future prospects for growing that cash.


After all, you don’t just want the dividend to be constant, you want it to GROW!


This is why you should focus on a particular type of dividend paying investments… investments that GROW their dividend consistently over time…


Consider Exxon for example.


Exxon has increased its dividend for over 30 YEARS. Indeed, if you bought Exxon as late as 2000, you would be collecting a 7-8% yield today based on DIVIDENDS alone (share price in 2000 was roughly $32, and dividends paid in 2013 were roughly $2.50).


At the same time, your initial position in Exxon’s stock would have risen 400%!


So you’d have made 400% in capital gains… and would continue collecting 7-8% per year in dividends.


And the best part is… the dividend keeps growing!


This is how you get truly rich from investing. Find investments that are Low Risk Dividend Growers and HOLD ON for the long-term. Less than 1% of mutual funds beat the market… why even bother with them?


For a FREE Special Report outlining how to set up your portfolio from this, swing by:


Best Regards

Phoenix Capital Research 





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Thu, 01/16/2014 - 18:25 | 4339097 SILVERGEDDON

This guy is probably heavy into Bitcoin just in time for another six hundred dollar pull back on the electronic version of fiat currency.

Oh well, printing that digital shit is cheaper - take a note there, Missus Yellin.

Thu, 01/16/2014 - 16:33 | 4338798 slightlyskeptical
slightlyskeptical's picture

"Less than 1% of mutual funds beat the market… why even bother with them?"

Another complete lie. It's more like 60% don't beat the market. About 95% beat the market before their expenses and the market has no expenses. You also have many funds that don't fit neatly in any market index or benchmark comparison. I say your chances are about 50-50 of getting market returns over a long term period in managed mutual funds. And about 40% of the time the index funds will beat you.

Thu, 01/16/2014 - 15:32 | 4338591 0b1knob
0b1knob's picture

Enron, if you include its history as  Northern Natural Gas Company, paid incresaing dividends for decades.   We all know how that worked out.

Its ALWAYS easy to know what you should have done 30 years ago.   Actually if you bought MacDonalds or Coke you would have made returns that would have made Exxon look sick. 

Thu, 01/16/2014 - 15:02 | 4338505 Fuh Querada
Fuh Querada's picture

One of the biggest mistakes newsletter writers make is believing any financial data published by companies traded on stock markets.

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