In today’s economic environment, I have become a firm believer in blue-chip dividend-paying stocks as strong investment strategy no matter how much or little you have to invest. Interest rates on bank accounts, CDs are abysmal and will not keep up with inflation. Real estate is risky and time-consuming. Tenants who don’t pay rent or unrented lots can quickly mount up expenses. Small businesses fail. Gold and precious metals are volatile. Growth stocks just as much. Blue-chip stocks, while not exciting, are not as prone to large market movements, and their dividend payments can help make up for market downturns in the long term, especially if one cost-averages down. Sure, you can buy mutual funds, but why pay someone to manage your funds when they are not guaranteed to do any better or worst than anyone else.
So, these are the stocks I like the best:
1. AT&T (T). They are part of an oligopoly on in the cell phone market, and have local monopolies in the cable business. Their dividend is very aggressive for a bell-weather stock at around 5%. They have been raising their dividend and still has room to grow compared to its 2007 levels.
2. Verizon (VZ). I like this stock for the same reason as T. High dividends, strong business, and it isn’t going anywhere. Owning both of these stocks might be redundant however.
3. Abbot Labs. (ABT). It is part of a strong sector, pharmaceuticals. They have been raising their dividend for decades. It is currently at a nice 3.5% as of this writing.
4. Pepsi (PEP). Pepsi has been around forever and has been raising their dividend almost as long.
5. iShares Russell 3000 Index Fund (IWV). Although I don’t like funds, Market ETFs tend to do better than buying stocks at random. It’ll give your portfolio diversity. You do not need a lot of money to buy any of these. $100 is more than enough. Buy shares as you can, average down when the price drops. Make sure you reinvest the dividends. It can take time, but once you get plenty of shares, the dividend reinvestments will grow your investment, even if the market isn’t performing. I also like tax-free municipal bonds, but am not familiar enough with them to recommend them strongly.
One of the best ways to invest your money that is less risky is to start an online business. You can start one with as little as 100 dollars down and you could be easily making 2000-3000 dollars a month. These businesses require little attention and you can literally make money while you sleep because the internet never sleeps.