Buying stocks for Dividends...

There are MANY ways to play the Stock Market. Given the posts I see today, many people imagine the Day Trader scenario of buying and selling stocks, holding the stocks for, at best, a week or two.

WHEN I get in the market, I'm a LONG TERM, DIVIDEND player. I wait for stocks that have been paying consistent dividends to become cheap, then I hold said stocks for 5 to 10 years.

The market can go up, and the market can go down. Don't care (much). As long as the dividends are consistent and paid on time, I'm happy.

Now, this is the old fashioned way of buying stocks. I still think it's the best way, especially for smaller investors.

The broker I use works this way and his method is to use a computer program to identify 20 to 50 mid to large sized companies that technical indicators say are undervalued. Then he visits the management of said companies and interviews them. Only if he's satisfied that they're under good management does he recommend the stock. He can do that because he represents some old, Pittsburgh money. If management takes a turn for the worse, he'll make a sell recommendation.

I lucked into this guy and, for the last 15 years, his picks have consistently made money. As he says, people who play derivatives, rise and fall slopes, and any other manner of stock market voodoo get ulcers the size of basketballs. I can't give out his name, even privately, because I found him as a friend of a friend. He doesn't usually work for small investors like myself.

Companies that are losing money will start cutting dividends big time. Even those that have had years of consecutive div payouts. The 4th quarter and 1st quarter of '09 will a blood bath for shaved div.s.

So check the earnings prospects for your companies. No one will sustain div.s when the aren't making the income to sustain them.

And good luck.