Income investing can be immensely profitable in the stock market. Here are the 4 major steps you will have to take in order to get into and manage income stocks.
1. Find a list of Dividend Stocks
There are many ways to do this. You can always do a Google search for the term list of dividend stocks, or top dividend stocks. You can also get a list by going to MSN money, Yahoo finance, or any other type of online stock information website.
2. Check Out the Companies
Of course just because a stock offers a 7% dividend does not make it a great investment. If the stock goes down 50% then your dividend is not going to make up for that loss. That is why any time you get into a long term stock it is very important to check the fundamentals of a company.
Make sure that the company is something you would feel safe holding onto for a long time. If it is not no amount of dividend yield should change your mind.
3. Enter the Position
If you are comfortable with that particular stock then it is time to enter the position. Make sure that you do not spend your last dime buying the stock. It is still important to diversify even when you are buying fundamentally strong stocks with high dividends.
4. Sell Calls
Not many people do this and I do not know why. Selling calls is a great way to increase your income from the investment. You do run the risk of getting called out and selling your position early, but it can definitely be worth it.
For more on Dividends visit http://www.stocks-simplified.com/List-of-Dividend-Paying-Stocks.html
For more on selling puts and calls visit http://www.stocks-simplified.com/selling_puts.html
When I was young I wanted to learn how to trade the stock market. So I traveled around the country listening to professional traders talk about how they are making money in the market. Now I understand how easy it is to make money in the stock market and started a site http://www.stocks-simplified.com to help others learn.