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Stock Investing For Dummies, 4th Edition by Paul Mladjenovic

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Chapter 9

Investing for Income

In This Chapter

arrow Familiarizing yourself with income stock fundamentals

arrow Selecting income stocks with a few criteria in mind

arrow Checking out utilities, REITs, and royalty trusts

Investing for income means investing in stocks that provide you with regular cash payments (dividends). Income stocks may not be known to offer stellar growth potential, but they’re good for a steady infusion of cash. If you have a low tolerance for risk, or if your investment goal is anything less than long-term, income stocks are a better bet than growth stocks. Long-term, conservative investors who need income in their situations can also benefit from income stocks because they have a good track record of keeping pace with inflation (versus fixed-income investments, such as bonds).

The bottom line is that I like dividend-paying stocks, and they deserve a spot in a variety of portfolios. In this chapter, I explain the basics of income stocks, show you how to analyze income stocks with a few handy formulas, and describe several typical income stocks.

tip.eps Getting your stock portfolio ...

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