Put “Higher for Forever” Prices in Check with This One Investing Strategy
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In this issue of Investing Daily Dose (IDD):
💲Make Your Money Work for You💲
Despite the numbing, data-stuffed reports that depict it, the U.S. economy isn’t numbers.
It’s people.
People who – despite all those “official reports” telling us everything’s peachy – are feeling gut-wrenching anxiety with every trip to the grocery store.
The reason: Food costs are a killer.
In the story “How Far $100 Goes at the Grocery Store After Five Years of Food Inflation,” The Wall Street Journal (WSJ) found that a $100 grocery list from 2019 is now a $136.83 list.
We’re talking about a jump of nearly 37%.
Staples like eggs were $2.36 in 2019.
Today, a dozen will set you back $3.84 – a 62% increase.
Price hikes of that magnitude generally leave folks with three options:
Buy less food – not an option if you were already buying just the necessities.
Buy the same stuff knowing that you haven’t spent this much of your income on food since 1991.
Or find investments that will offset those (not going away) higher costs.
That last point – about higher costs – is critical to really comprehend.
Remember: When inflation “eases” … it doesn’t mean prices are going down. It just means that prices aren’t rising quite as fast.
Barring some sort of “Black Swan” event, prices will stay higher than in 2019 … forever.
That makes our “Door Number Three” option outlined above the only real choice you’ve got.
Whether you’re a recent grad who’s a work force newbie, an established professional, or a retiree on fixed income, extra income can be a major difference-maker.
Preferably, passive income – where you can put some of your cash to work … and avoid trading more of your time for money.
Stock Picker’s Corner (SPC) Chief Stock Picker Bill Patalon likes Dividend Aristocrats for part of a passive-income strategy. By “Aristocrats,” we’re talking about companies that have raised their dividend payouts for (at least) 25 consecutive years.
And Bill likes these for good reason. Companies that achieve this level of ‘income nobility’ make things that folks will always buy … like paint … or glue … or tape. They have brand names that people like and trust.
Once a company earns this moniker … management does all it can to keep it. So the business is managed to generate the cash flow required to keep boosting that payout.
Over time, the ‘yield on cost’ – the yield on what you originally paid for the stock – can become quite impressive. And, since share prices over time tend to rise as the payout increases (meaning the current yield remains fairly steady), you’ll also see a share price gain.
And a starting point for anyone new to income investing is to research the ProShares S&P 500 Dividend Aristocrat ETF NOBL 0.00%↑.
With a yield of 2%, NOBL can be a great starting point for a passive-income portfolio.
What’s more, NOBL offers a benefit that is hidden from all but the most-inquisitive investors: It’s a terrific source of investment ideas.
Every evening this week – at 7 p.m. – check in here as we feature a different stock from NOBL and talk about the opportunity with each investment.
We’ll see you then.
