The only logical reason to invest in common stocks

Investing is a job. A job is where you make money. You make money in the stock market by realizing a return on investment.

Return on investment comes in two forms: capital appreciation and dividends. Of the two the only one with a degree of certainty is the cash dividend, which is a company policy and announced on a quarterly basis.

Capital appreciation is the result of good analysis. When you identify a high-quality company that offers good value, meaning a repetitive area of high dividend yield, and the company has a long-term history of dividend increases, the probabilities are that capital appreciation will follow.

When added to the dividends and dividend increases collected along the way the result is real total return, which is the only logical reason to invest in common stocks.”

— Kelley Wright, IQTrends