Tax-deferred accounts such as traditional and Roth IRAs
are ideal places for income-generating investments such as
dividend-paying stocks and bonds. Why? Rather than pay taxes
annually on dividends and interest received, IRAs allow your
nest egg to grow tax-free, entirely avoiding those annual
charges that can put a damper on your retirement funds'
Not every company is slashing its dividend these days.
Some of the market's better performers are easing up on their
purse strings and sending more money out to their
The New York Yankees of the '50s and the Chicago Bulls and
Dallas Cowboys of the '90s have one crucial element in
common: consistent excellence in their organizations and
performance. That's a rare accomplishment, but if you think
it could never occur in your portfolio, think again.
Carefully chosen dividend-paying stocks could be your key to
The conventional wisdom is clear: Bonds are best for
people in or near retirement. They provide the desired income
and can be much more reliable than stocks. Well... yes and
no, if you ask me.
I assume that you, like everyone and his Aunt Audrey,
would love to find the next
Wal-Mart (NYSE: WMT) -- to dig out the
market's most precious small companies. Back in October 1977,
Wal-Mart traded at a split- and dividend-adjusted price of
$0.05 per share. Today, it trades for around $50. In a little
more than 30 years, Wal-Mart has turned a $5,000 investment
into $5 million.
"It's the world's greatest company, period."
Â -- Arjun Murti, Goldman Sachs analyst
The past year has been brutal for dividend-focused
investors. Companies that not long ago were considered
rock-solid dividend plays --
AIG (NYSE: AIG),
MBIA (NYSE: MBI), etc. -- are slashing
payouts left and right. More companies cut their dividends in
the first half of 2009 than in all of 2006 through 2008
combined. (That'd be 400 vs. 382, for the curious.)
Bristol-Myers Squibb (NYSE: BMY) just keeps
Not every company is slashing its dividend these days. Some of the
market's better performers are easing up on their purse strings,
sending more money out to their shareholders.
It's been a scary year for dividend investors.