How To Buy Cheaper Shares With Higher Yields
My colleague Amy Calistri of The Daily Paycheck has been getting quite a few questions regarding her portfolio.
#-ad_banner-#To date, her Daily Paycheck portfolio has received a mind-boggling total of 1,747 dividend payments since she first started back in 2009. The total for these payments comes to $72,266.67.
And in the last 12 months, her portfolio has received 407 dividend payments for a total of $17,035.91 — for an average of $1,419.66 per month.
Some of her readers may have a hard time understanding how she’s been able to earn so many dividends and in such a short amount of time.
In fact, Amy recently received a question from a reader about how Amy has been able to quickly accumulate more shares of stocks she owns… without having to “buy” them.
Q. I’m confused how stock purchases are made in The Daily Paycheck portfolio.
For example, in the last two months, 29 shares of Gabelli Multimedia Trust (NYSE: GGT), 12 shares of of Wells Fargo Advantage Global Dividend Opportunity (NYSE: EOD) and 10 shares of Nuveen Real Estate Income Fund (NYSE: JRS) appeared. Surely these cannot all be due to reinvesting? Am I missing something? Thanks so much.
— Brian R. from Shelby Township, Michigan
Here’s what Amy had to say…
A. Thanks for writing in, Brian. All the securities that you mention come from my “High-Yield Opportunities” portfolio. They also all pay quarterly dividends. Those two features go hand in hand when it comes to adding a lot of shares at one time.
I’ve copied my dividend reinvestment transactions directly from my brokerage account. And as you’ll see below, all of those additional shares came from dividend reinvestment. Of course the icing on the cake is that all these additional shares are going to generate even more income — and more shares — when the next quarterly dividends are paid.
If you’re not already aware by now, you should know that reinvesting dividends is one of the most underrated yet powerful strategies around.
Amy put it best in her recent issue of The Daily Paycheck when she said, “Using a dividend reinvestment strategy, I not only minimize the average price I pay per share — but I also maximize income and growth.”
Think about it this way. If you see that prices at the pump are falling, you’ll probably go out and fill up your car with a fresh tank of gasoline. After all, prices could very well go up soon — and nobody likes to pay more than they have to.
That’s exactly what Amy does with her dividend reinvestment strategy in The Daily Paycheck. This disciplined strategy allows you to buy more shares when a stock is cheap and buy less shares when the stock is more expensive. It’s automatic.
You see, the real beauty of her strategy is that by setting up your account to reinvest dividends automatically, you don’t have to worry about timing the market.
As Amy says:
“Staying objective during a market pullback isn’t easy. It’s hard to pull the trigger to buy more shares when other market participants appear to be panicking. But you don’t have to put yourself in that position. If you set up your investments to dividend reinvest, the discipline is automatic. And I’m all for any strategy that helps me maximize growth and income without lifting a finger.”
When it comes to finding dividend paying stocks, reinvesting dividends and knowing when to flip the income switch on your portfolio, there is no one better than Amy Calistri. Using her Daily Paycheck strategy, four out of five of Amy’s picks have made money. On top of that, she’s been able to pocket (and reinvest) just over $1,400 per month from the dividends she’s received. To gain access to her research and see how she’s been able to accumulate over $72,000 in total dividends, simply go here.