At year-end 1965 the Dow Jones Industrial average closed at 969.26. At year-end 1981, sixteen years later, it closed lower at 875. That’s a long time of doing nothing. Imagine what it must have felt like had you retired at year-end 1965 at age 65. That’s why dividend paying stocks are so important. They help you live to fight another day.
At Young Research, the Retirement Compounder’s program seeks out stocks that pay dividends. Not only that, the company needs to have paid dividends for a long-time and have a history of increasing dividends. Let’s say you find a few of these gems that yield 5%. If you compound 5% for 16 years, you double your money. The sixteen year ’65-’81 period may seem like a rare event occurring once a century. But look at how the first decade of this century has played out. You’ll want to invest accordingly.
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