NEW YORK (MainStreet)Younger investors often gravitate towards "next big thing" stocks and disregard the slower growing, dividend paying stalwarts. But buying those dividend payers, and reinvesting the distributions, is a great way to ensure long term success.
Let's take a quick poll: Raise your hand if you bought or wanted to buy into the Facebook IPO last year.
Like I thought: a lot of you did.
Facebook's going public was a big deal, and a lot of investors, both young and old, wanted in on it.
But the road for FB has been rocky. And a lot of those early investors own shares today that are worth less than what they paid for them.
As a matter of fact, some analysts think that FB shares won't get back to the IPO price for a long time.
If you bought shares hoping to get rich, you've been sadly disappointed. Unfortunately, this is not uncommon for "hot" IPO stocks.
You see many IPOs perform the way FB has. They trade up at first and then sell off, trading for less than its IPO price for years sometimes.
The truth is more investors have achieved their wealth slowly by investing in good companies with solid businesses than through big-deal IPOs.
And one of the best ways to build wealth is to look for companies that are not only prospering but are also sharing the wealth with its shareholders by paying a regular dividend.
Younger investors often overlook dividend stocks. That's because they are perceived as boring, and exciting companies, like FB, often do not pay dividends.
Of course, when you hear stories of twenty-something CEOs becoming billionaires, it's easy to see why the FBs of the world attract all the attention...