It is my firm belief that most investors will lose money in the stock market over their lifetime.
Left unchecked, the psychology of the market will lead you to do just the opposite of what you should be doing.
We must follow a process we are 100% confident in. Doubt is the gateway to destructive behavior.
Are you confident and secure in your investing process? It is my firm belief that most investors will lose money in the stock market over their lifetime. It is not that the market is a bad place to invest your money but left unchecked, the psychology of the market will lead you to do just the opposite of what you should to be doing. The great investors know this. Consider Warren Buffett's famous quote, 'We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful'.
How do we overcome our natural instincts to sell when we should be buying? Here's how...
First, we must follow a process we are 100% confident in. Doubt is the gateway to destructive behavior. Many approaches have proven successful over time. I have chosen income investing, primarily through individual Dividend Growth Stocks. How do we become so confident in a process that we are willing to trust our life's savings to as the world crumbles around us?
Confidence comes from knowledge and experience. We must study our approach and understand the process. It is easy for me to watch stock prices crater knowing that it is not only providing an excellent entry point for future capital appreciation, but also higher current yields that will grow each year as the companies continue to raise their dividends. Knowing how it works is good, but comfort in the process comes from having been there before and experiencing the gains after coming out of a downturn.
Finally, the most important step is selecting great investments. For me, those are good solid dividend companies that have a proven track record of increasing their dividends and the financial ability to continue doing so in the future.
Below are several companies that are leaders in their industry and have increased dividends for more than 30 consecutive years for your consideration:
3M Co. (NYSE:MMM) is a diversified global company provides enhanced product functionality in electronics, health care, industrial, consumer, office, telecommunications, safety & security and other markets via coatings, sealants, adhesives, and other chemical additives. The company has paid a cash dividend to shareholders every year since 1916 and has increased its dividend payments for 56 consecutive years. Yield: 2.4%.
McDonald's Corporation (NYSE:MCD) is the largest fast-food restaurant company in the world, with about 35,000 restaurants in 119 countries. The company has paid a cash dividend to shareholders every year since 1976 and has increased its dividend payments for 37 consecutive years. Yield: 3.4%.
The Procter & Gamble Company (NYSE:PG) is a leading consumer products company that markets household and personal care products in more than 180 countries. The company has paid a cash dividend to shareholders every year since 1891 and has increased its dividend payments for 56 consecutive years. Yield: 3.2%.
Exxon Mobil Corp. (NYSE:XOM), formed through the merger of Exxon and Mobil in late 1999, is the world's largest publicly owned integrated oil company. The company has paid a cash dividend to shareholders every year since 1882 and has increased its dividend payments for 32 consecutive years. Yield: 2.8%.
Each of the above companies has a proven business model that has allowed them to excel in the good times, and more importantly, seen them through tough economic times. Sure, some companies that have been cornerstones for decades may slip, that's part of investing, but there are always great companies ready to step in and fill the void. It is easy to be confident and secure when you invest in the best dividend stocks in the world!
Full Disclosure: Long MMM, MCD, PG, XOM in my Dividend Growth Portfolio. See a list of all my dividend growth holdings here.