When it comes to investing income, I think the sector you want is obvious -- investments that pay income.
Many Stock Market Analysts Focus on Industry Sectors
The trouble is, many stock marketing professionals and the investors who follow them, think in terms of sectors. That is, types of industries such as Manufacturing, Retail, Fast Food and so on.tn pas cher
It's a form of market timing, really. Only instead of trying to time the ups and down of the market, you're trying to time the ups and downs of pieces of the economy.
It's Easier to Deceive Yourself Into Thinking You Understand One Industry
By narrowing your focus, you can gain the illusion that you really understand what's driving it, and therefore can predict whether it's going up or down, and the same with the various companies within. You believe you can say, people are buying more computers so buy semiconductor companies. Or people want to be healthy, so sell fast food franchises.tn requin
Many stock market traders jump from sector to sector, buying and selling, trying to hitch a ride on whatever sector is going up.
Different Sectors Do Behave Differently in Different Markets and Economies
This has the additional advantage that there are always sectors rising and falling. Even in this bear market, some sectors are doing better than others.nike tn pas cher
When it comes to stocks that pay dividends, it is true that sector investing partially applies to it. That's because some types of companies are more likely to pay dividends.
Some Types of Companies Are More Likely to Pay Dividends Than Others
For examples, utility companies are expected to pay dividends unless in terrible financial trouble and, as regulated businesses with many customers who do not have the choice of switching providers, are not supposed to get into that much trouble -- at least not often. That's why they're traditionally considered low risk investments suitable for widows and orphans.
High tech companies rarely pay dividends. They're generally expected to use their cash to keep the company up to date with technology.
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Financial Stocks Were Good Dividend Stocks Until the Crisis
However, change does happen. Prior to the financial crisis of 2007-2009, financial stocks were considered good dividend payers. I believe Bank of America had raised its dividends every year for over one hundred years. However, those that even survived 2008 saw their stock prices plummet and their dividends cut. One family of Exchange Traded Funds of dividend paying stocks even came out with a new ETF -- high dividend payers minus financial stocks.
Some Companies Must Legally Pay High Dividends
Some types of companies are required to pay high dividends as the legal price of not paying income taxes. This is true of Real Estate Investment Trusts and Master Limited Partnerships. So I can certainly say that real estate and midstream energy companies are good income investing sectors.
Many Consumer Brand Names Are Good Dividend Payers
Another company to look for are those that are old and established, with common consumer brand names, such as McDonald's, Hershey and Wrigley. Philip Morris/Altria has one of the best records of paying and raising dividends.
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So when it comes to finding investing income, follow the advice of the Watergate informer "Deep Throat." Follow the money.
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