Dividend Investment Strategies

Below are some great divident investment strategies.

1. Stocks that currently pay dividends:

A. -As income taxed at 15%, dividends are now worth more, especially for those in the top tax bracket.

RETIREES ONLY:

As a retiree, that spells an additional, reliable source of income in the equity portion of their portfolio to help supplement some of their social security earnings and other retirement savings.

B. -Dividend payments might increase to attract more seekers of steady income in the equity portion of their portfolios

This is in keeping with the current upward trend. Although dividend payout ratios declined over the past 3 decades, this past year's dividends for the S&P 500 actually increased.

For example, in the second quarter of 2002, dividends for the S&P 500 companies rose by 7.8% over previous year. Past performance is not a guarantee of future results.

C. -These stocks will likely become more valuable as demand for them rises. They currently appear not to have the value of the plan’s passage built into their price.

2. Companies with high free cash flow

Companies with high free cash flow - Adjusted cash flow after capital expenditures -- that do not currently pay dividends.

Current tax laws incent companies to use their positive cash flow for stock buy-backs, acquisitions and options – not shareholder dividends.

The new tax law could make the payment of shareholder dividends more attractive to these companies with free cash flow ... thereby increasing their potential market value.