Should You Invest In Dividend Stocks? The Answer…
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For many people, the barrier to entry to investing is one that is hard to overcome. Perhaps they don’t have the money to start investing or they do have the money but have absolutely no knowledge of which assets they should buy. After getting over these initial hurdles, one question that typically pops into the mind of an investor is what investing strategy should I pursue? They ask, do I want to start building a dividend portfolio or a growth portfolio? This is an essential question to get right if you want to see incredible financial results so let me guide you towards the right decision now!
You’ve got your money right and are ready to take on the world of stock investing — congratulations. Whether you realize it or not, this one simple decision sets you apart from millions of other people. Hard to believe right? Anyone with even an ounce of financial education will know that the stock market is one of the primary drivers of wealth, especially when used correctly. However, as of 2021 only 56% of Americans said they own stock which means that literally over one hundred million people are giving up this golden opportunity. But, not you. You are ready to take the stock market by storm. The only question is, which type of stocks should you buy?
For most people, the answer to this question is buying what their Uncle Frank tells them to buy and as you can imagine this isn’t an ideal investing strategy. However, you probably already knew that! You see, most educated investors understand that there is a division in stock investing. You either invest for growth or invest in typically slower growing companies that offer regular payouts to its shareholders. Let me first define what both a growth stock and a dividend stock is so I know we are on the same page and then I will outline why you would want to invest in either one and finally what I believe is the best way to maximize your use of the two!
Growth Stock Basics
First off, what is a growth stock? A growth stock is any stock that is anticipated to grow at a rate significantly above the average growth of the market. Examples include Facebook, Shopify and Tesla. Now, you may be wondering how a company can grow at such a rapid pace and part of the reason is because they don’t typically offer dividends. You…