| > | | | | shares. |
| Forget making a profit; instead focus on the income | | | | Total Amount of shares at the end of 2000: 463.82 |
| provided from your stock portfolio. That’s | | | | shares. |
| right! Forget making a profit. The burden is now lifted | | | | Total Amount of shares at the end of 2001: 474.47 |
| - no more pressure on making a buck in the stock | | | | shares. |
| market. (Instead of trying to bend the spoon, that is | | | | Total Amount of shares at the end of 2002: 490.23 |
| impossible, instead just think of the spoon as | | | | shares. |
| — omigosh! - I’m in the Matrix!) When | | | | Total Amount of shares at the end of 2003: 512.60 |
| you focus on the amount of money your holdings | | | | shares. |
| are providing in dividends — and when those | | | | Total Amount of shares as of April 1, 2004: 522.23 |
| companies selected have a history of raising their | | | | shares. |
| dividends each year — a lower stock price | | | | On April 1, 2004 Comerica closed at $54.65, for the |
| allows the dividends that are being rolled back into | | | | total market value of $28,539.87 for 522.23 shares of |
| the stock to accelerate your income. The total value | | | | stock. To put the total $28,539.87 into perspective, |
| of your portfolio may go lower, but your income | | | | an interest rate of 15 percent a year on $3,333.34, |
| from that lower priced portfolio would increase | | | | compounded annually for fourteen and a quarter |
| dramatically. Profit by income! | | | | years would return $28,282.15. |
| To demonstrate this tip, I’m going to take | | | | Since this excerpt from my book Comerica has |
| you back in time, but the strategy of that time is | | | | raised their dividend again, from 52 cents a share per |
| just as viable today, as it was in the past. The year | | | | quarter, to the current 55 cents a share per quarter, |
| is 1990, the stock for the demonstration is Comerica, | | | | payable to shareholders of record on March 15, 2005. |
| and the amount of money invested was $3,333.34. | | | | I own Comerica stock and I have no intention of |
| Comerica (CMA) was selected for one simple reason | | | | ever taking a profit! I will continue being a buyer, as |
| — in 1990 CMA had a historical record of | | | | long as the company continues its program of raising |
| raising their dividend for the past 21 years. | | | | their dividend every year. |
| Today’s CMA has a 36 year history of raising | | | | However, I also understand that in the stock market |
| their dividend every year. | | | | there are no guarantees! It is for this reason and this |
| In January 1990 Comerica was selling at $48.38 a | | | | reason alone, that diversity is a necessity. If I knew |
| share, paid a quarterly dividend of 65 cents a share, | | | | for certain that CMA would continue its program of |
| with a dividend yield of 5.37% (.65 divided by 48.38 x | | | | raising their dividend every year, and that the next |
| 4 x 100 = 5.37%). The result of just holding this | | | | 14 years would provide better than 15 percent return |
| stock through the years, never taking a profit, and | | | | on my money, I would only own CMA stock. It is |
| simply having the dividends reinvested each quarter | | | | because of this risk of no guarantees’ in |
| (commission-free) back into the stock is chronicled | | | | the stock market that the rewards for investing in |
| below: These are the actual returns based on the | | | | the stock market are much higher than a passbook |
| closing prices of the stock on the company’s | | | | savings account, CD’s or Bonds. |
| dividend payout date (the date a company purchases | | | | So, to beat the risk of no guarantees’, |
| their stock on the open market for investors enrolled | | | | and to reap the benefits of a better return, I |
| in their stock dividend reinvestment plan; The figures | | | | diversify into other companies with the same |
| were taken from the research I did, and is from an | | | | historical performance. Through a systematic |
| excerpt from my book The Stockopoly Plan | | | | approach of dollar-cost averaging into my stock |
| — Investing for Retirement.) | | | | positions every quarter, along with my quarterly |
| Comerica: (with the dividend each quarter rolled back | | | | dividend reinvestment, I increase the amount of |
| into the stock) $3,333.34 into CMA in January, 1990 | | | | dividends paid to me each quarter, from every |
| at $48.38 a share: Shares purchased, 68.90 shares. | | | | company that I own. My measurement for success in |
| Total Amount of shares at the end of 1990: 72.92 | | | | the stock market is not measured by the amount |
| shares. | | | | my portfolio is worth. It is measured by the amount |
| Total Amount of shares at the end of 1991: 115.01 | | | | of ever-increasing cash dividends received from |
| shares. | | | | every stock that I own. As a matter of fact, when |
| Total Amount of shares at the end of 1992: 118.85 | | | | my portfolio dips in net-worth, my dividend income |
| shares. | | | | accelerates. The reason for this is simple. The lower |
| Total Amount of shares at the end of 1993: 245.78 | | | | my port- folio’s net-worth, the higher the |
| shares. | | | | dividend yields of the stocks in my portfolio. |
| Total Amount of shares at the end of 1994: 256.96 | | | | All my personal holdings in the stock market have the |
| shares. | | | | same basic theme. They are all purchased |
| Total Amount of shares at the end of 1995: 268.78 | | | | commission-free, have a long-term history of raising |
| shares. | | | | their dividend every year, and are purchased with the |
| Total Amount of shares at the end of 1996: 277.83 | | | | intent of supplying ever-increasing dividend income |
| shares. | | | | for my retirement years. The Stockopoly Plan was |
| Total Amount of shares at the end of 1997: 285.32 | | | | written with this purpose or goal in mind. The Plan |
| shares. | | | | itself uses a timing approach for purchases of more |
| Total Amount of shares at the end of 1998: 436.65 | | | | shares each quarter, along with the dividend |
| shares. | | | | reinvestments. |
| Total Amount of shares at the end of 1999: 446.04 | | | | |