How do we overcome our natural instincts to sell when we should be buying? Here's how...
Confidence
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?Experience
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.Quality
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. (MMM) 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 59 consecutive years. Yield: 2.2%
Johnson & Johnson (JNJ) is a leader in the pharmaceutical, medical device, and consumer products industries. The company has paid a cash dividend to shareholders every year since 1944 and has increased its dividend payments for 55 consecutive years. Yield: 2.5%
The Procter & Gamble Company (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 59 consecutive years. Yield: 3.1%
Exxon Mobil Corp. (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 35 consecutive years. Yield: 3.8%
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, JNJ, PG, XOM in my Dividend Growth Stocks Portfolio. See a list of all my Dividend Growth Portfolio holdings here.
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