The Dividend Daily

The markets were struggling to hold the early gains today, but buyers stepped up in the afternoon to get the averages to close near the highs of the day.

Building on the recent economic optimism, Ford (F) management decided to double the current dividend payout as the company’s yield continues to rebound to a bit better levels (near 4%). As for fundamentals and earnings, Tiffany (TIF) shares finished down following the company’s update on holiday sales. Wall Street analyst upgrades helped boost stocks like Altria Group (MO) and Ryder (R).

On the flipside, cautious analyst chatter had names like Microsoft (MSFT) and Dunkin Brands (DNKN) trading in the red. Finally, shares of Nokia (NOK) climbed higher on the company’s better-than-expected sales update. Be sure to check out our post on whether Nokia shares could be on the path of a turnaround or if this move is up is real or just a head-fake.

Avoid Building a Bridge to Nowhere

I am sometimes asked if I miss trading for a living. I can say with 100% certainty “no way!” Despite making a good living from trading stocks for years, I was building very little in terms of wealth for the long term. Plus, the strain on your brain to make numerous timing decisions does not make for a great quality of life.

Every day, week, month, and year, you start from scratch again. There are no guarantees you can continue to read the market tape as well as you think you will. You’re only as good as your last trade. One bad decision can wipe out months of gains. Then there’s the constant lure to lose your trading discipline. You start to question yourself even after making good trades. You must also deal with the regret of not holding shares for an extra day or two. In the end, it’s all about surviving to trade the next day. I know the business media paints the trading gains as glamorous, but there is plenty of carnage that keeps the success rate abysmally low — regardless of what software, guides, subscription services, forums, or other tools you use.

Rather than living in the trenches of trading warfare, I decided to build a system that could make compound interest alleviate the worries of surviving as a trader (not to mention I wanted to remain in an area where my wealth can grow immensely over time). Dividend investing offers those rewards for those who are willing to be patient and understand how awesome compound interest can be, particularly when reinvesting dividends and focusing your aim at buying assets (dividend stocks) that build income. We all can surely use income streams in retirement other than just social security or a pension that fewer and fewer employers are even offering.

So instead of focusing on short term stock movements and the manic advice of today’s media mavens, continue on your path of building a bridge that you can one day walk across. Your bridge of wealth can potentially even leave a solid legacy in place for generations to come.

Thanks for reading, and I’ll see you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.