I understand where this fear comes from. Their savings feel threatened when stock values drop. My standard answer is, “Wait. What goes down must go up. Historically, the stock market has always had its ups and downs, but on average it’s been on a very healthy upside.
As I reflect on customers who are much less afraid of today’s market, I continue to find a common thread. They are heavily invested in stocks producing qualified dividends.
One of the HUGE advantages of qualified dividends is their tax treatment. They are taxed using the much more favorable capital gains tax rates instead of the regular tax rates. For some of my retired clients who have reached the sweet spot, they pay little or even no tax on their eligible dividend income!
Qualified dividend-paying stocks, which provide stability and income to a portfolio, are sometimes derided as boring or heavy compared to higher-octane growth stocks. But boring can be beautiful. In the tough economic times we find ourselves in, those qualified “boring” stocks paying dividends can be wonderful and refreshing.
Here are some of the best dividend-paying stocks with excellent track records to consider.
McDonalds. Last year, they paid $5.52 per share and their price rose, giving them a double whammy.
Watcher and bet. They only paid $3.48 per share, but their price rose even better than McDonald’s.
Johnson & Johnson. Their dividend per share last year was $4.24 per share. Not as good as the other two above, but their stock market value also exceeded a normal range last year.
Home Depot paid $6.60 per share and the stock price rose, but perhaps only temporarily.
Lockheed Martin paid the highest dividend rate I found last year of $11.20 per share. Their stock price also rose by a healthy amount.
Wal-Mart didn’t do as well last year but remains a solid player over the long term. Their dividends paid last year were just $2.20 per share.
There are many good stocks that pay dividends. Such as utility stocks. Entertainment actions, etc. For more information, talk to a good stockbroker to tailor your holdings to your specific goals.
Did you hear? Prov 11:18 says, “The wicked earn deceptive wages, but he who sows righteousness reaps sure reward.”
Kelly Bullis is a CPA in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com. Also on Facebook.