A Personal Stock Market Investment Philosophy

∙ Make every investment in the stock market a long-term investment.

My Mother worked as a teller in a small bank in Dover, New Jersey. The name of the bank was called The Dover Community Bank. While working at the bank (she eventually became a branch manager) she enrolled in the bank's dividend reinvestment plan, making purchases of the stock through pay-roll deductions. She continued purchasing the stock through the years, having the dividends from her shares in the bank reinvested into more shares every quarter. By the time she left the bank (in the early seventies) she had accumulated around 300 shares of The Dover Community Bank.

My Father, when he retired, had the dividends from those shares sent home ? to help ends-meet. When my Dad passed away at age 80, my brother and I inherited over 7,600 shares of The Bank of New York, all originating from those 300 shares of what was once called The Dover Community Bank.

From this personal experience grew an investment philosophy that all stock market investments in a security should be purchased with the intent of providing dividend income to help ends-meet during retirement, with the understanding that no one can successfully retire without financial freedom. So every investment now in a security is purchased with the intent of holding that security (and adding to it during the years) until the dividend income from that security is ample enough to ease the loss of income from retiring from my job.

∙ Make every investment in the stock market provide you with an ever-increasing cash dividend for the rest of your life.

With the philosophical investment approach of holding a security position forever, what criteria should I be looking for in that security? Certainly dividend income ? that's a given! And since I never intend to sell the security, capital gains may not even be an issue.

I would argue that a company that just pays a dividend isn't good enough. Instead, I will only purchase those companies that have a long history of raising their dividend every year. This will eliminate a whole bunch of risk. It would eliminate the possibility that the company is 'cooking their books;' after all, the money has to be there to pay the shareholder. And because this company has been raising their dividend every year for many years, it eliminates the risk of investing in a start-up company that may not even be around in a year or so.

Also, the rising dividend every year would help off-set the risk of inflation and the risk of a lower stock price during the year would actually accelerate my income from the security.

Since I would want my position in the stock to grow through the years, thus increasing my dividend income, all dividends would be reinvested back into the stock, until retirement. A lower stock price during the year, therefore, would allow the dividend from the company to purchase more shares, at a higher dividend yield, and would simply accelerate my dividend income.

∙ Diversify into no more than twelve different companies.

Owning shares in twelve companies is plenty. It would provide the diversity to sleep well at night, and provide a cash dividend every week of the year. Start by owning three companies, and build from there. Determine how many shares you want of each company before moving on to the 4th, 5th, and 6th. Invest in sets of three different companies at a time, until twelve are owned.

∙ Persevere

Success in the stock market is not so much derived by buying a company's stock at the lows, but is almost guaranteed successful through dollar-cost-averaging over the years. One of the most powerful methods of investing in the stock market is having the perseverance to continue adding shares to your stock positions over the years, through reinvested dividends and quarterly infusion of funds, be it 50 dollars, or 100 dollars a month. Persistence, persistence, persistence, and your stock market investment philosophy will become unbeatable!

To read the PREFACE from the book 'The Stockopoly Plan- Investing for Retirement' visit: http://www.thestockopolyplan.com

Charles M. O'Melia is an individual investor with almost 40 years of experience and passion for the stock market. The author of the book The Stockopoly Plan ? Investing for Retirement; published by American-Book Publishing. You can invest in the book at: http://www.pdbookstore.com/com files/pages/CharlesMOMelia.shtml

You have permission to publish this article either electronically or in print, free of charge, as long as the author bylines are included. A courtesy copy of your publication would be appreciated. Please email to mailto:charles@thestockopolyplan.com

---

Enron Cure

Let's hope you did not have any of the Enron... Read More

Never Fall In Love!

Recently I watched my favorite football team lose a vital... Read More

Successful Trading ? Establish Your Risk Level

Before you embark upon a journey of trading stocks or... Read More

Complacency Indicator

If you haven't heard of the technical indicator with the... Read More

The Elephant

Four blind men were asked to give a description of... Read More

Money, Insanity and Wall Street

Money: the most charged word in the planet. It means... Read More

Duck

Duck! No I don't mean a quack, quack. I meant... Read More

Stock Market Course .... Day Trader Online Seminar ... Can You Generate Profits Trading from Home?

When it comes to stock market trading it PAYS to... Read More

Big Buildings Can Mean Big Economic Disaster

AS BUILDERS BEGIN WORK ON THE FREEDOM TOWER in New... Read More

The Inside Scoop on Mutual Fund Rip Offs

The bear market that showed up at the end of... Read More

Long Term Investing

In his wonderful book, 'Multiple Streams of Income', best selling... Read More

No Load Mutual Funds: Investment Hype vs. Investment Help

With the internet such a huge part of our daily... Read More

Making a Stock Watch List

I am taking the time to help others learn the... Read More

8 Penny Stocks to Avoid

There are many good penny stock investments available, which could... Read More

No Load Mutual Funds: Boost Your Portfolios Returns

Investors who exclusively use broadly diversified, no load mutual funds... Read More

Why Technical Indicators

The fight continues to rage among traders who use technical... Read More

Learn to Calculate a Stock?s Pivot Point

Stocks breakout from properly formed bases everyday but many investors... Read More

Buying Mutual Funds

It looks like the market is ready to start up... Read More

Investing in the Stock Market

From the book 'The Stockopoly Plan' by the author Charles... Read More

Which Way The Market

I am hearing predictions by brokers, financial planners, talk show... Read More

Traders, Defend Against the Dreaded Death Spiral.

It has often been said that there is only two... Read More

A Personal Stock Market Investment Philosophy

∙ Make every investment in the stock market a long-term... Read More

Moving Averages

Every day on CNBC-TV they show a 200-day moving average... Read More

12 Basic Stock Investing Rules Every Successful Investor Should Follow

There are many important things you need to know to... Read More

Whos Calling?

Its dinnertime and the phone rings. It's Joe Noname with... Read More

Stock Trading Diversification

This is the continuing story of our two imaginary traders,... Read More

Social Insecurity

Just about everything you have been told about Social Security... Read More

How Covered Calls Turned a Trader Around

Sidney felt sick as she looked at her latest OptionsXpress... Read More

What Are You Waiting For?

Do you own any mutual funds? In an IRA or... Read More

Overvalued & Underbought

With all the bad news that has been dumped upon... Read More

Stock Trading - Daddy, Why Arent We Rich?

One Saturday morning, while he was sitting at his computer... Read More

Value Investing: Selecting From The Bargain Bin

Picking a beaten-down stock requires a different kind of selection... Read More

Box Of Chocolates

Ever have one of those sample boxes of candy? Each... Read More