Do You Practice Safe Investing?
Safe Investing is the process of making an investment where your risk has been reduced, and the potential for a return is high. Safe Investing allows you to make wise investing decisions. Safe Investing is easy and requires you to apply the following simple steps, by investing in companies that:
1. Have a strong brand loyalty
2. Produce products or services that will still be in demand 25 years from now
3. Have very little competitors
4. Are consistently profitable, and have low debt
5. Have a long history of paying dividends, and increasing dividends (example: Procter & Gamble has had 57 years of consecutive dividend increases)
6. Are undervalued
In addition you want to make sure that your investing costs are as low as possible. Therefore owning individual stocks is going to be cheaper than paying fees associated with mutual funds and index funds. Dividends are important, because they provide you with a margin of safety. Once dividends are paid out they can never be taken back.
So, in the event that you end up with a failed company and the stock is reduced to zero, the dividends you have received over the years will provide you with a safety cushion. Without dividends you only have the stock price appreciation to count on.
Generally a dividend-paying stock will be a safer investment than a non-dividend paying stock. So practice safe investing, and avoid taking on risky investments! Safe Investing provides you with investments that carry reduced risk, and the potential for long-term growth and financial success!
Did you enjoy reading this article? If so, I encourage you to sign up for my newsletter and have these articles delivered via e-mail once a month…and it’s free!