Market timing is also difficult for traders. Even investing legend Warren Buffett admits that he doesn’t know what the market will do this week or next year. And unpredictable volatility can make or break a short-term trader. Timing the market looks great until you miss a few great days and watch your returns get cut in half.
There is a less stressful way. Buy dividend stocks you believe in, hold them tight, and let compounding work over several years. The three companies discussed here have rewarded patient shareholders for age. They are also hiding in plain sight.
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With business properties scattered around your neighborhood, let’s start with a company you probably use every day without even realizing it. American Tower (NYSE:AMT) Your phone owns reliable metal structures (and easy-to-miss small cells) for calls, texts and Internet connections.
The company has about 150,000 sites in 22 countries, and wireless carriers pay rent to use them. As a real estate investment trust (REIT), American Tower transfers most of its earnings to shareholders through buybacks and dividends. You’re looking at a dividend yield of around 4% with over a decade of annual dividend growth.
The bull case for American Tower writes itself. People don’t use their phones less over time.
A note for tax planning: REIT dividends are generally taxed as ordinary income rather than at the qualified dividend rate. You can get around that issue by putting your American Tower shares in a tax-saving retirement account, like I do in a traditional IRA.
Let’s go back to Warren Buffett. My other recommendation has been a Buffett favorite for decades.
American Express (NYSE:AXP) Not only does the payment process; It issues the card and Runs the underlying payment network. This approach gives the company more control over details like fees and customer data than competitors Visa (NYSE: V ) and MasterCard (NYSE:MA).
Shatabdi Vishal also stands out by focusing on premium services for high quality customers. This luxury-flavored strategy offers some recession resistance on the spending side.
Looking ahead, American Express is remarkably innovative with blockchain-based travel data apps and heavy use of artificial intelligence (AI) tools. The company may be old, but it remains resilient.
