As Rodney said, “Build income streams wherever and whenever possible.”
The problem is, with the Fed’s foot on interest rates, there’s been a herd-like move into dividend-paying stocks for a couple of years now. And I’ve got to warn you… this is NOT a one-size-fits-all strategy. As the saying goes, there’s still no “free lunch” in the market.
Too often, ultra high-yielding stocks entice novice investors based on yield alone. Whether or not the payouts are sustainable is often an afterthought.
Don’t make this mistake. That 12% yield doesn’t look so good when the stock price drops 12%… or more.
So while you shouldn’t dismiss dividend-yielding stocks as a source of that all-important income, you should be smart about it. That’s why I’ve been steering Boom & Bust subscribers into smart yield plays for over a year now.
The investments I recommend don’t always have the absolute highest payouts, but that’s ok because yield isn’t my sole focus. I’m looking for investments that provide just the right mix of yield and price appreciation, from rock-solid companies that have sustainable business models.
Here’s one example… This chart shows a healthcare investment I recommended to Boom & Bust subscribers last May.
Since then we’ve collected three quarterly dividend payments totaling $1.31 per share. This gives us a yield of 6.3% based on our entry price of $20.93. At an annualized rate of 8.3%, that’s more than four times what 10-year Treasury bonds will pay you.
Plus, we’ve gotten price appreciation of 23% on top of that!
Best of all, I fully expect the strong performance of this investment to persist because it caters to booming, Baby-Boomer-driven demand for low-cost healthcare. And the trend is just beginning to gain steam. I’ll be sharing all the details in our next issue of Boom & Bust.
I can’t recommend this investment in today’s Survive & Prosper… but I do encourage you to join us at Boom & Bust before we send out our March issue.