Why Dividend Stocks Matter Now

The single largest misconception out there for individual investors is that it's not possible to generate consistent gains in changing market conditions by owning stocks. See, smaller investors don't have the time to follow the markets every day, and have a tendency to enter bull markets once they've peaked and sell out of bear markets right before they bottom out.

And once investors have been burned in a stock, they're going to be reluctant to jump back in with their hard-earned money. Even so, no investors ever made money by placing cash in their mattress.

That is why, after three straight years of negative returns from the S&P 500 index, we launched the Dividend Stock Advisor (formerly called the SaveSafe Plan) model portfolio in January 2003. The basket of stocks and municipal bond funds went on to generate a total return of 13.50% in 2003, when the major market averages rebounded significantly. But more importantly, the basket went on to gain another 13.64% in 2004, while the gains for the S&P 500, Dow Jones Industrial Average and Nasdaq Composite failed to crack the double digits. (The yield on a five-year CD, which could also be a useful benchmark for the aims of the model portfolio, is around 4%.) ...