Long Term Dividend Investing And Bank Shares

Summary

  • An approach to long term dividend investing with quality banks.
  • An approach to dividend investing dividend growth and reinvestment of payouts.
  • Several investment options that offer greater than 3% annual dividend return.

Market fluctuations have the tendency to make unsecure investors nervous. History will show that over the long run, even factoring in periods of market volatility; equities generally provide the best return on investment for retail shareholders. When dealing with market fluctuations one of the keys to success is simply to remain calm. It is important for retail shareholders not to sell their positions during short term fluctuations in the market. Simply put, short term fluctuations should not impact buying and selling decisions for long term investors.

To extend on my thoughts, I highly recommend young investors to begin accumulating a position within the Canadian banking sector. If an investor approaches investing with a long term plan which includes not allowing short term market fluctuations affect their buying and selling patterns then they will be in a very good position to reap the long term benefits of Canadian bank shares. Historically, Canadian banks have gone up in value, but there have been times that they significantly decreased in value, such as in the 2008 global financial recession.

What remained consistent is that they have always increased dividend payouts over time in parallel with growing profits. As the banks grow their dividends, investors who hold their positions reap the most benefits. Once the investor takes a position the cost of the stock does not change. but ideally the dividend that the investor receives will increase over time. Therefore as dividends rise the yield also increased on the shareholders shares.

The Canadian banks each have their own story and unique areas of growth but are all highly profitable, with strong dividends and fundamentally sound organizations. It is in my opinion that at present there are very few reasons to believe that the value of Canadian banks should decrease in the near or midterm. One approach to the sector is to build a position and reinvest the dividend payouts. In addition, contribute by increasing the originally position regularly or in line with the dividend payouts. The investor could reap the benefits through of the dividends, increases in the dividend payouts and possible through appreciation in the stock price.

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February 2019
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