If you want to be a successful long-term investor, you need
to diversify your portfolio. When you diversify, one stock’s losses can be made
up for with the other stocks’ gains and dividends.
Dividends are important for many investors because you’re
being paid regardless of how the stock performs. If a stock is performing
poorly, then you’re being paid to wait until it recovers. When the stock
eventually recovers, you have accumulated all those dividend payments and will
now see appreciation. However, it’s not always that easy.
If a company is not fundamentally sound and lacks positive
cash flow, a strong balance sheet or isn’t profitable, then you could be in for
a world of hurt. In these cases, you will often see a high yield, which can be
a red flag. If the company’s stock is plunging, the yield will move higher.
Additionally, some faltering companies will actually raise their dividend and
increase their buyback in order to maintain investor interest despite the
underlying company’s woes. Fortunately, you don’t have to worry about that with
the stocks mentioned here. They have been chosen because of their strong
fundamentals.
The five stocks mentioned here…
Source: Investopedia