Asset allocation model
In the up and down world of the stock market, safe, consistent performers are a welcome part of any well-rounded portfolio. There are no sure things in investing, but ultra-reliable and passive income-producing dividend stocks offer benefits that other types of investment do not, making them staples of any truly diversified portfolio. Dividend-paying companies having typically matured past the point of reinvesting all profits in growth. Instead of rewarding investors with skyrocketing share prices, dividend stocks pay out a set portion of profits – typically two to five percent – on a per-share basis. This means potential to reap the rewards of price appreciation and dividend payouts – a Warren Buffet-approved strategy. While high dividend yields should factor into decision-making when purchasing stock, they should not be the only option to consider. Some companies, like Johnson & Johnson, have a track record of increased dividend payments year over year spanning decades, making them a popular choice for investors. AT&T and Exxon Mobil two additional blue chip, dividend-paying stocks favored by investment experts. Dividend ETFs are also a good entry point, allowing owners to broadly diversify their exposure to these assets.