14 of 14 people found the following review helpful
Great Book Covering the Basics of Dividend Investing,
This review is from: The Little Book of Big Dividends: A Safe Formula for Guaranteed Returns (Hardcover)
With the havoc the recent down market has wreaked on people's retirement plans, I've become very interested in dividend paying stocks. If carefully selected, dividend stocks have the potential to provide a steady stream of income regardless of the fluctuations of the stock's price. Notice I said carefully - as stocks can cut or even stop dividend payments at any time. But if the stocks are selected based on a strict set of criteria that is setup to minimize the chance of cutting the dividend, great recession proof wealth can be created over time.
The concepts covered in this book are mostly basic, but I would have avoided some mistakes if I had read it BEFORE I attempted to invest in dividend paying stocks. If you're an experienced dividend investor, this book is probably a bit too basic for you. The one exception is if you are interested in utilizing a formula in order to pick stocks based on consistent pre-defined criteria. The book provides a basic and an advanced version of it's Big Safe Dividend (BSD) formula. The two formulas vary based the ease of use along with the number of variables used.
The author takes the BSD formula one step further and provides a completely free website that calculates the parameters for you. So all you have to do is apply the criteria explained in the book, and you should be able to pick winning stocks over the long term. The website is updated weekly, and you can go check out the recommended dividend stocks at any time.The formulas were backtested all the way back to 1994, and they consistently beat the market by at least 4 percentage points on an annual basis. The advanced BSD performed even better.
Note that you should do your own due diligence and not completely rely on a formula to make your decisions. But these formulas can be used as a great starting place and will provide a filtered set of stocks for you to work with.
The book wraps up by touching on some of the more advanced investments, such as REITs and ETFs. There is even some discussion on properly utilizing various investment strategies and the principle of diversification.
In summary, the book is a bit basic. But if you're not currently following a systematic approach that is producing consistent returns over time, maybe you should give it a quick read...