NEW YORK ( TheStreet) -- Most self-directed investors should categorize stocks into two primary columns. Column A is dividend-paying stocks, and column B is every other stock that you're not going to buy.
Granted there are a select few that come along every now and then that can be considered for shorter-term capital appreciation, but otherwise sticking with dividend payers is more likely in the long run to increase your portfolio.
Dividend-paying company executives understand they must stay aggressive each quarter or risk being forced to cut the dividend (and upset investors). I believe it's the "in your face" number hanging out there that keeps the team relatively more focused than a company that doesn't pay a dividend. A team focus on bolstering earnings is synonymous with rising share price.
Many investors make the mistake of believing we continue to live in the world of old-school investing. In days gone by, if you wanted a stable high-yield dividend, you bought utilities as a retirement income vehicle.Today with computers and online access, large and small investors can find dividend-paying companies increasing in price. Having your cake and eating it too is more possible than ever. Obviously not every dividend-paying stock rising in price is a buy; consequently I search for those that offer a favorable risk-to-reward. Take a look and see if you agree.