RIDE OUT STOCK MARKETS UPS AND DOWNS ON A WAVE OF DIVIDENDS!

Last week's lackluster performance of the overall stock market convinced me more than ever of the wisdom of investing for dividend income, rather than potential capital gains. I've been investing for quite a few years now and I've had my share of terrific gains, buying low and selling high. But when I decided to redirect my investments towards only dividend paying stocks, I've seen a steady increase in my investment income.

When the market took such a tremendous dive in 2008 and early 2009, I was as concerned as anyone else. However, when I realized that the dividend income was only minimally affected by the drop in stock prices, the whole situation came into perspective. What I also realized was that I had been presented with a wonderful opportunity to increase my holdings at greatly reduced prices, which is exactly what I did. At one point during the recession, the value of my total holdings was down nearly 50%. During that time I added to my investments as much as my budget would allow. Now my stock portfolio and IRA have recovered dramatically and since I bought more during the worst of the recession, my personal stock portfolio is worth more than it ever has been.

The real thing to keep in mind here, when you're investing for dividends the ups and downs of the market become almost irrelevant. As a bonus of this type of investment strategy, companies who have a long history of rewarding shareholders through steady dividend payments also tend to do well as far as gains in stock price. Who says you can't have your cake and eat it too.