Stock Investing 101

Dividend aristocrat’s are companies that have increased their dividend every year for 25+ years. They are almost always very impressive, well run, profitable companies. It is no coincidence that companies on dividend aristocrat lists beat out the stock market indexes in both the short and long term.

Here is an article that highlights this years dividend aristocrat’s.

Since both 2008 and 2009 were turbulent years for the stock market many companies that usually increased their dividend each year have not over the past few years. This means that the companies that are on this list are even more prestigious and elite.

Being on the dividend aristocrat list does not guarantee anything. However it does mean that the company is generally going to be well run and in a good state financially. Do not buy shares of a company that is on the dividend aristocrat list just for the heck of it. You still should do lots of research before investing your money anywhere. But it is a good sign that a company would be on the list.

Over the past 20 years both investors and companies have shunned dividends for the most part in puruit of growth and other “flashy” things to do with their money. Investing is not about being flashy, it is about being sound and getting solid returns over time. Over the past 50 and 100 years companies have returned most of their capital gains because of dividends and not because of an increase in share price. It is perfectly fine to invest a small portion of your portfolio in  ”speculative” companies but you want to put the bulk of your portfolio in solid, dividend paying stocks.