October 27, 2014
Profit From Some Of The Most Reliable Dividend Payers On Earth
By Amy Calistri
Over the past few weeks, I've shared with readers two crucial types of dividend stocks that make up my three-part Daily Paycheck Retirement Strategy.
By using the right combination of dividend stocks, I've been able to collect more than $1,400 per month in dividend checks over the past year, and I've seen my original $200,000 real-money portfolio grow to over $300,000 today -- for a 50% gain in less than five years.
In previous issues of StreetAuthority Daily, I talked about my "sweet spot" high yielders -- which maximize income -- here, and my "Lifetime Income Growers" -- which maximize growth -- here.
But what about minimizing risk? Especially in today's volatile market?
Well, that's where my last group of securities comes into play. I've used them to make my portfolio 26% less volatile on average than the S&P 500.
I call them "Steady Income Generators."
These are under-the-radar companies and funds that deliver consistent dividends no matter what happens in the market.
Unrest in the Middle East... a spike in the national debt... a global recession...
Whatever happens domestically or around the world, these stocks have proven they can weather just about any storm that comes their way.
To give you an example of the kind of securities I'm referring to, take a look at one of my favorite "Steady Income Generators", Reaves Utility Income Fund, which trades under the ticker symbol UTG.
Reaves' portfolio is made up of some of the most stable utility and telecom stocks in the world -- global companies with dependable cash flows and near-monopoly power.
Since launching in 2004, the fund has paid more than 120 straight monthly dividends, and it sports nearly a 6.0% yield at recent prices.
To put that into perspective, just think of all that's happened since 2004...
Greece's debt problems dominated the news, sending the world's markets lower... Gas prices soared... Rates on CDs and savings accounts have essentially been stuck at zero... Budget crises here in the United States have caused more turmoil...
Yet throughout this whole time, Reaves has paid a steady dividend.
Holding securities like Reaves helps minimize the overall risk of my Daily Paycheck portfolio. And as I mentioned earlier, together my holdings have been an average of 26% less volatile than the market.
But don't make the mistake of thinking that Reaves's steady dividend and low risk means you have to sacrifice gains.
Like many other "Steady Income Generators" I hold, Reaves is a strong performer.
In fact, since I purchased shares in late 2009, Reaves has returned more than 78%.
And many of my other Steady Income Generators have returned 57.4%, 61.2% or even 69.8%. Despite the gains they've already made, most of these are still "buys" today.
In fairness to my paid subscribers, I can't give you all the names of my current holdings. But you can see just how strong my "Steady Income Generators" portfolio has been over the past few years.
Together, my three portfolios work in concert to deliver solid income and growth. But I've come to think of my "Steady Income Generators" portfolio as my strategy's workhorse. I sleep better knowing that whatever rough patches and bear markets lie ahead, this third of my portfolio will likely keep churning out paychecks, day in and day out.
So now you know the three different groups of stocks that make up my total Daily Paycheck Retirement portfolio, and why each of them is so crucial for creating a portfolio that generates consistent dividend income.
High-yielders are key to maximizing income, "Lifetime Income Growers" are perfect for maximizing your gains and "Steady Income Generators" are essential for minimizing your risk and getting paid daily.
I like to think of them as three interlocking gears of my retirement system's engine.
But what makes my portfolio even stronger is that I've found a way to turbocharge that engine. By adding one simple feature to my system, I have been able to multiply my portfolio's capacity to generate income.
Too few investors take advantage of this strategy, but it can compound your growth and increase your income potential, exponentially. It rarely gets talked about by the financial community, but I discussed it recently at St. Edward's University, where I presented exactly how my Daily Paycheck Strategy works.
You can watch my entire live presentation -- and learn this simple secret to turbocharging your own Daily Paycheck Retirement Portfolio -- by simply clicking here.
Good investing,
Amy Calistri
Chief Investment Strategist
The Daily Paycheck
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