The beauty of the dividends

If I look at my portfolio from my first year of investment, I am pleased that I have already accumulated 2,894 Swiss francs in new cash. What was the cause for this joyous surprise? Very simple: dividends.

Dividends are often overlooked when they are issued. Look at the Japanese stock index and you will see that it’s at a lower level than twenty years ago. The fact that you receive dividends every year and can buy stocks at relatively cheap prices is often forgotten.

Often, people come to the conclusion that investing in stocks is a risk. However, they are wrong.

A better way of looking at stock investment is to simply compare what you originally paid into your portfolio and compare this with its value today. We can do this for any stock with a Google spreadsheet that shows the ranks of the individual shares.

Before I start investing a new portfolio, I first look at my old portfolios to see if there is anything else to be done there. This would be the case if stocks are suddenly very low or if diversification is no longer ensured because a stock has suddenly become more expensive.

In my first year’s portfolio, diversification is guaranteed. Regarding the ranks, most stocks are in the green sector. Only RWE has a very low value rank. I decide against selling, because I want to save money and saving money is about investing, not selling.

Should I invest my dividends of 2,894 francs? It may be too early for me because I just bought 5,000 francs’ worth of other shares. So, I will wait until more dividends have accumulated. Why create more work when it is not necessary? Stock investing doesn’t take a lot of time if you only do what you need.