Maximizing a Stock Market Investment

Maximizing a stock market investment

There are several factors an investor in the stock market should consider for a maximum return on an investment:

1. All stock purchases should be commission-free.

2. All stocks purchased should be from a company that has a history of raising their dividends every year.

3. The company should not only have a history of raising their dividend every year, but should also show price appreciation in the market place, on a year to year basis.

4. All dividends from the companies should be rolled-over into more shares of the company, until retirement. This should be done by the company, for the shareholder, commission-free.

5. The companies purchased should have staggered dividend pay-out dates so the income from 12 companies will provide the shareholder cash dividend income every week of the year. No more than 12 companies should be owned, otherwise, you're probably spreading your money too thin.

6. A systematic approach of dollar-cost averaging should be done on a quarterly basis. A savings plan should be adopted to add to your holdings every quarter, along with the dividend reinvestment.

7. Stocks purchased should pay a dividend yield of at least 2.0% or better. A low 2.0% dividend yield isn't necessarily bad because it means the company in question is using most of their profits too expand. In other words, it's a growth stock with business, profits and earnings growing. A growth stock makes up for the lower dividend yield because their stock prices will more than likely rise faster.

8. The company should have been in business at least eight years,showing dividend increases each year. This will eliminate the risk involved in putting money into a risky new start up company(the kind that is going to change the world - they are just too hard to find).

9. The company must have a stock dividend reinvestment plan (DRIP). If the dividend paid by the company is $2.63 for the quarter, all of that $2.63 will purchase a further percentage of shares (partial shares) and this should be done automatically for you by the company or their Transfer Agent.

10. The companies you purchase should be purchased with the intent of realizing ever-increasing cash dividends for you and your family for the rest of your lives.