Get additional income with dividend investing

Dividend investing has become more popular over the last few years, as investors look for steady returns and less volatile investments.

Whether you’re investing in dividend stocks or in income-paying funds, these kinds of investments can help provide a steady income and balance out the ups and downs of market prices in the short term.

If you haven’t considered dividend investing yet, here our three reasons why you should have income investments as an essential part of your portfolio:

1. New income stream

If you’re investing in companies that pay steady dividends, or in funds whose objective is to give regular income payouts, you can build a new income stream while you wait for the prices of your investments to go up over time.

2. Lower portfolio risk

Income-paying investments are usually more stable, and usually have higher quality assets. Companies that are able to consistently give out dividends are typically strong companies with stable earnings, which means they are less likely to be as volatile as other companies.

In addition, some income-paying investments may invest in bonds or fixed income, which does not usually move in sync with the stock market. This adds diversification to your portfolio, and helps lower your overall portfolio risk.

3. Financial cushion

Investing can be volatile in the short term, especially for stocks. By applying dividend investing, you’re able to still earn from your investments in the short term, even in times when the markets may not be going your way. Additionally, this can help you stay calm during periods of high volatility, knowing that part of your portfolio is invested in high quality assets that are still yielding returns.

How do you get started?

There are several things you can do to help you choose from the available investments for this strategy.

For stocks, you can check out the Investment Guide in your COL account to help you filter which stocks may be good dividend picks. Make sure to check out our research notes on your chosen stocks, or better yet, read our COLing the Shots to get dividend stock ideas such as our REIT picks.

For funds, go to the Mutual Fund tab in your COL account and click on Funds > List of all funds. From there, you can input ‘income’ in the search field to get a quick list of funds that have income payouts.

As a final tip, you can also attend our dividend investing webinar by signing up at https://bit.ly/COLevents2024.