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Inergy, L.P. Message Board

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  • wareham2620 wareham2620 Oct 11, 2008 11:52 AM Flag

    Inergy, L.P. Declares 28th Consecutive Increase in Quarterly Cash Distribution

    It was articles like this that had me change over to dividend paying stocks.

    Sitting on Grandpa's dividend-paying stock portfolio is a fine approach if your goal is to preserve wealth and generate an income stream. And building your own is a pretty good approach if you want to build wealth, particularly if market volatility makes you nervous. How so? Instead of taking those dividends as income, reinvest them -- use them to buy more stock.

    The practice of reinvesting dividends can turn boring performance into market-beating returns, partly because dividend-paying companies tend to be stable and mature. At first glance, that may appear to be a mixed blessing: good because they're much less volatile in choppy markets, bad because they're less likely to rocket to 10-bagger levels of return. But they'll show solid growth over time, and combined with the power of dividend reinvestment, a well-chosen portfolio of dividend-paying stocks has a great chance of outperforming the market over the long haul.