As a dividend growth investor knows, it’s not exactly a secret that the U.S. stock market has been one of the greatest long-term wealth generators in history.
In fact, between 1871 and 2015 the S&P 500 has recorded a compound annual growth rate, or CAGR, of 9.1%, increasing a staggering 285,436.41 times in value.
However, as with most things in life, actually reaping the potential rewards is much harder said than done.
For example, according to BlackRock, Inc. (NYSE:BLK), the world’s largest asset manager with $5 trillion in assets under management, the average retail investor has woefully underperformed the market over the past few decades. As seen below, the average investor generated an annualized return of 2.11% over the last 20 years compared to annualized returns of 8.19% and 5.34% from stocks and bonds, respectively.
Despite the market putting up very solid growth over that time, most investors ended up treading water, after accounting for inflation.
But there is great news for those who seek to harness the incredible power of the stock market to build long-term wealth and achieve financial independence over time.
Learn five ways that being a dividend growth investor can help you reach your financial goals and make you a better long-term investor. By keeping a steady hand and staying disciplined, investing in dividend growth stocks can provide a stable, growing income stream that can fund your needs, desires, and retirement over time.
Source: Insider Monkey