Friday, January 27, 2012
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The Secret to Making More Money That Most People Don't Know

-- By Amy Calistri

I've found what really works when it comes to income investing. It's a secret that could help you earn returns nearly triple most "regular" income stocks. (Full Story Below)

Also in Today's Issue...

Could This Be the Most Lucrative Investment Move You'll Ever Make?
A couple years ago, concerned with the first inklings of the coming credit crisis, one man took his cash and vowed never to buy another stock that didn't have a nice fat dividend. If you want to see your nest egg grow and pay you something now -- instead of waiting for a capital gain that might never happen -- then you need to see this man's story.

Go here to see "the most lucrative investment move" he made.
Was AAPL a Buy or Sell Going into Earnings?
Revolutionary software tells you which way to play it! Plus it's proven 91% accurate. A new way to find the hottest stock picks for the coming week. That means 9 out of 10 stock picks will be winners... This can give you thousands of dollars in trading profits in days. I'll show you how $10,000 grows to $81,595.55 in 12 months!

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The Secret to Making More Money That Most People Don't Know

With $200,000 in actual cash fronted by StreetAuthority -- the publisher of Dividend Opportunities -- I was given the go-ahead to build a real-money portfolio using the "Daily Paycheck" strategy.

The strategy is straightforward. I'm building a portfolio of income stocks that pays me a dividend for every day of the month. And because I want to make those dividends grow as large as possible, I'm also reinvesting every cent of the payments.

It's a simple way to invest and many investors have heard about it before. But until now, most have only seen this sort of strategy backtested -- not put in place in real life.

The good news is that while we all know being paid dividends regularly -- and reinvesting those payments -- is "supposed" to work, the actual results have been much more exciting than even I expected.

For instance, I'm now averaging more than $1,350 per month in dividends and have earned more than $27,000 in total dividends.

But this strategy has also uncovered something surprising that could have a big impact on how you invest.

My portfolio holdings are separated into three different groups. Those securities in the "High-Yield Opportunities" are the highest yielders. These investments pay more than 10% on average. The "Fast Dividend Growers" are those companies increasing their payments quickly. And the "Steady Income Generators" are the holdings that can simply be counted on to pay stable dividends year after year without much change.

What's surprising is which of these groups has performed the best. The "Fast-Dividend Growers" have the lowest average yield of the three. These holdings pay an average yield of 5.8%. But this group has an average total return of 37.1%. Compare that to an average total return of 15.7% for all the portfolio holdings.

In other words, the "Fast Dividend Growers" have returned nearly three times more on average than the portfolio as a whole... despite paying yields lower than most of the other holdings.

Take Altria Group (NYSE: MO), one of the holdings in my "Fast Dividend Growers" group. The stock pays a 5.7% yield -- solid, but not eye-popping. But since mid-2008 the company has raised the quarterly dividend from $0.29 per share to $0.41. That's an increase of 41% during the most turbulent economy in generations.

With that sort of stability, it shouldn't be a surprise the stock returned 27.6% in 2011, compared with a gain of 2.1% in the S&P 500 (dividends included).

So what can you take away from this finding?

First and foremost, it proves what you've always heard. Investing in dividend-paying securities -- especially those paying increasing dividends -- and reinvesting those dividends can be a very lucrative strategy, especially in a tricky market.

But more than that, it proves that often it isn't the highest-yielding dividend payers that give you the highest return. High yields are tempting, especially if you are after current income. However, more often than not those companies able to consistently increase their dividends turn out to be the better investments.

Always searching for your next paycheck...

Amy Calistri
Chief Investment Strategist -- The Daily Paycheck


P.S.
-- I didn't invent The Daily Paycheck strategy. StreetAuthority's co-founder Paul Tracy gets the credit for that. He even collected more than $6,000 in a single month in dividends. To learn more about how to put this strategy to work -- no matter the size of your portfolio -- you can visit this link.]

Disclosure: StreetAuthority owns shares of MO as part of The Daily Paycheck's $200,000 "real money" portfolio.  In accordance with company policies, StreetAuthority always provides readers with at least 48 hours advance notice before buying or selling any securities in any "real money" model portfolio.


Income Notes

Apple (Nasdaq: AAPL) has Wall Street's full attention after hinting at plans for the company's $100 billion cash pile that may lead to stockholders receiving a dividend.

Apple is "actively discussing" uses for its cash, including a dividend, buyback, acquisitions and supply chain investments, Chief Financial Officer Peter Oppenheimer told analysts and investors yesterday in an earnings conference call.

-- The Washington Post


Why Buy a Stock Yielding 2% When You Can Find One Paying 26% Right Here?

The average stock yields 1.6%. But an obscure mining company we like tossed back 19% in dividends last year (plus another +34% in capital gains).

If you think that's impressive, wait until you see this video...


Breaking News

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The 10.1%-Yielder You've Never Heard Of

This unique security offers investors the rare chance to capture high yields and explosive growth. Yet, despite its solid fundamentals, most investors don't even know it exists.

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A Top 5 Income Stock for 2012

A 5.0% yield, monopoly control in its market, and more than 35 dividend increases make this stock one of our favorites for 2012.

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