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6 Steps to Buy a 7% Dividend Paying Stock With Low Risk

6 Steps to Buy a 7% Dividend Paying Stock With Low Risk

2011-09-20



High dividend yield in a low risk portfolio? How is that possible? Well there is a way that you can invest your money and earn a high dividend yield without taking much risk.
I think that’s this is basically what we all want as dividend investors: high dividend yield from low risk stocks. But unfortunately, it is rarely the case. If you remember my yellow pages (YLO) analysis you know that high dividend yield is usually followed by dividend cuts (especially if the dividend yield is combined with a high payout ratio!). So how can you find these precious gems on the market? In fact, there are a few steps to build the most solid portfolio with the most impressive dividend yield:

#1 Build some cash in a money market fund

Building a strong portfolio combining high dividend yield and low risk companies requires patience and discipline. The very first step you need to accomplish is to build up enough cash so you can move quickly when you are ready. So instead of gradually buying stocks as you gather a $1,000 or so as I suggest in Dividend Investing, you can also put your money aside and wait a little while.

 

#2 Build your stocks on the radar list....

While you are gathering your cash





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