If your broker offered you free money, would you say no?
Of course not.
Yet many investors do just that.
They essentially say no to free money, missing out on gains such as 431%.
A perfect example is Apple.
Investors have continued to make mistake after mistake there since the stock started climbing in 2014.
But I have a chart for you today that shows the awesome, and simple, power of adding one step to your investment.
And no, its not options.
Most people would call this step so simple, its boring.
But when you see how it can help you grab better gains like clockwork, youll realize the blunder most investors are making.
And youll never look at investing the same way again.
Theres a Better Way to Buy Apple
Lets say you own Apple Inc. (Nasdaq: AAPL).
You get a payout from the company every quarter.
To most investors, its just a sprinkling of extra cash to spend.
But what if you reinvested the dividends?
The chart below gives you an idea:
(Source: Capital IQ)
Just on price alone, your Apple shares would have appreciated about 330% since 2014.
But if youd reinvested your dividends along the way, your returns would be 431%.
Thats more than 30% better.
Get Paid to Invest
Theres a crucial aspect of dividends that most investors tend to ignore.
When a successful company decides to pay a dividend, it tends to raise the payout periodically too.
Some, like Apple, increase the payout like clockwork every four quarters.
Others increase it every few years.
Still more raise it when they feel the business has reached a new level of profitability.
In any case, the longer you own the stock, the more youre getting paid.
Reinvesting Dividends Is the Way to Go
The best part is that reinvesting dividends is super easy.
For most online brokers, its as simple as clicking a few buttons.
From that point on, every quarter, your dividends are used to buy more shares your broker does it automatically.
I hope you see what I mean about leaving free money sitting on the table.
Thats why I believe reinvesting dividends in a select handful of stocks is the way to go.
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