Focusing on a dividend portfolio monthly payment strategy is a wise investment strategic decision. The majority of stocks will pay their dividends on a quarterly basis as opposed to a monthly payment basis.
The process of research which stocks pay a monthly dividend payment is a time consuming effort. You can begin your research process on line with financial web sites such as CNBC.com, Yahoo Finance.com, another good research tool online is the web site the dividend detective.com. One should also utilize their online brokerage website and research tabs, such as Fidelity.com, Van Guard.com Td Ameritrade.com etc.
When researching stocks that pay a monthly dividend you want to focus your attention on the stocks that you can afford to purchase. Among the stocks to consider for your own portfolio, include the following stocks; Conroy’s Canadian dividend stocks that trade on the US stock exchange, Closed end funds, MLP’s Master Limited Partnerships, Preferred stocks, REITs stocks Real Estate Investment stocks, Utility stocks, Technology stocks.
You should also consider reviewing the market sectors that contain the highest dividend paying stocks. According to the web site the dividend detective com, here is the top sectors to consider for your portfolio; Chemicals, Energy partners/Coal, Energy partnerships/ Exploration & production, retail, restaurants, steel, Technology sector/ semiconductors, semiconductors equipment, Technology IT software systems, technology components.
This monthly dividend strategy should be combined with a portfolio strategy that incorporates income from CD’s, Bonds, Annuities. Financial experts recommend that you should build a bond and CD ladder strategy to build your monthly dividend and interest income. You can also build a dividend monthly and quarterly ladder strategy.
A dividend portfolio strategy to consider is the following; look for stocks with a price range between $5 to $50 per share, combined with a dividend yield between 4% to 20%. Make sure you review the company cash flow and earnings per share (EPS).
When your stocks that pay a quarterly dividend begin to show a capital gain between 15% to 50% range sell that stock for profit. You can then take the proceeds from the sale of the stock and purchase additional stock shares of stocks that produce a monthly dividend payment. In my own portfolio I currently own 9 stocks that are producing a monthly dividend stream of income.
In addition to utilizing the proceeds from the sale of my stocks that have capital gains, I also will cash out my dividends and use those dividends to purchase additional monthly dividend payment stocks. Another strategy to utilize income is to write covered option calls and use the premium received for that covered option call to purchase additional dividend paying stocks.
As with any investment strategy you will face risks. Risk is defined as a measurable possibility to suffer lose of principle, or not to gain portfolio value. The following are some risks to consider for any investor; Credit risk, exchange risk, inflation risk, interest rate risk, Liquidity risk, Political risk, underwriting risks.
With proper research on your part you can mitigate and improve your chances of a positive cash flow with capital gains.