Reinvesting those dividends at a lower stock price accelerates

Posted by semimouldingtr on June 2nd, 2021

The cash dividend income will increase every quarter, no matter what the stock price of the company is at any given time in the market place. As a matter of fact, once you have owned the stock for 10 or 15 years, you’ll be torn as to whether you want the stock to go up or to go down, since a lower stock price will allow your dividend reinvestment to purchase more shares, thereby accelerating your cash dividend income. The rising dividend every year will help off-set the risk of inflation.This will be especially helpful when you retire and start having the dividends sent home, rather than having Anti-theft Cap Mould the dividends rolled over into more shares. During the retirement years, when the dividend is being sent home to help ends-meet, the price of the stock doesn’t matter. Your income increases every year anyway, because every company owned has a program of raising their dividend every year.After retirement, if your account is worth 0,000 one year and due to a severe drop in the stock market, the net value of your securities drops to 0,000, the net worth of the securities at 0,000 would still generate a higher cash dividend income.

The net worth of your holdings means little, if the income produced from your holdings is increasing every year, no matter what the net worth. That is the partial reasoning behind investing in only those companies that raise their dividend every year. The other reasonis to eliminate risk in investing in the stock market. A company that has been raising their dividend every year MUST be doing something right or the money wouldn’t be there to pay their shareholders ever-increasing cash dividends.The lower the stock price goes, after your initial investment, the higher the dividend yield of the stock. This is extremely powerful and beneficial for you when you are still having the dividends reinvested.

Reinvesting those dividends at a lower stock price accelerates your cash dividend income. And if you are in retirement and no longer investing in the stock, the lower stock price does not affect your dividend income at all. The cash dividend income will still increase every year due to the company’s program of raising their dividend every year.As time goes on using this type of investment plan/approach you will discover that by reinvesting those ever-increasing cash dividends, coupled with stock appreciation is a very powerful wealth creating formula!