Right now, Royal Dutch Shell trades at a 5% dividend yield. For every $70 share you purchase, you get $3.60 in annual income. Although I expect the dividend to rise in the next year, let’s assume that the quarterly dividend stays static at $0.90 per share (in the interest of conservatism).
Under those assumptions, each share of Royal Dutch Shell purchased today stands to collect $7.20 in total, cumulative dividends over the next two years. Why is that important from a principal protection standpoint? Because it only takes a few years of collecting solidly high dividends to severely mitigate the risk that falling stock prices can have in making you feel as if … Read the rest of this article!