<span style="font-weight: 400;">A dividend is a distribution of some part of a company’s profit to its shareholders. These are payments made by publicly-listed companies as a reward to investors for investing their money into the company. In short, dividends are token rewards that are paid to shareholders for investing in a company. While major profit is kept within the company, which is used for future expenses and ongoing projects. </span>

<span style="font-weight: 400;">Building a dividend portfolio will <a href="https://www.cryptoknowmics.com/news/diversify-cryptocurrency-portfolio/">diversify your holdings</a> and are popular among investors as they provide <a href="https://www.suredividend.com/a-beginners-guide-to-generating-passive-income-from-bonds/" target="_blank" rel="noopener">safe income and return on investments</a>. Many investors include dividend-paying stocks in their portfolios for several reasons. The foremost being that they provide investors with monthly, quarterly, or annual regular income.  </span>

<span style="font-weight: 400;">A </span><a href="https://samuelssonsrapport.se/utdelningsportfolj/">dividend portfolio</a><span style="font-weight: 400;"> combines methods to withstand inflation and market fluctuations. These are time-tested methods in which you put half of your portfolio into stocks and another half into bonds. As investors grow older the need to beat inflation diminish as the time horizon shortens. But in the case of young investors, it is best to confront inflation risks. </span>
<h2><span style="font-weight: 400;">Step by Step Guide to Set-up Your Portfolio</span></h2>
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<h3><span style="font-weight: 400;">Diversify</span></h3>
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<span style="font-weight: 400;">Always remember that you are investing for your upcoming future needs and not for competing with King Solomon’s fortune. Generally, diversifying your holdings to at least 25-30 stocks, and diversifying your weighing into five to seven industries will give dividends more growth and stability. </span>
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<h3><span style="font-weight: 400;">Financial Stability</span></h3>
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<span style="font-weight: 400;">Choosing financial stability over growth offers the best results. Although, having both is best but still if you have to choose in between, then it is best to choose financial stability on priority. Also, dividend stability is the main priority if you want to avoid a dividend cut. </span>

<span style="font-weight: 400;"><a href="https://en.wikipedia.org/wiki/Financial_stability" target="_blank" rel="noopener">Financial stability</a> can be measured by companies’ credit ratings - a quantified assessment of creditworthiness.  </span>
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<h3><span style="font-weight: 400;">Choose Companies Cleverly</span></h3>
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<span style="font-weight: 400;">It is best to opt for companies with modest payout ratios. Where payout refers to anticipated financial returns and distributions. The payout ratio is the income paid to investors in the form of distributions. </span>

<span style="font-weight: 400;">Also, make sure you opt for companies with a long history of raising dividends. Companies with a history of raising their dividends steadily over time, often tend to continue the same for long periods assuming that business will continue to bloom. </span>
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<h3><span style="font-weight: 400;">Reinvest</span></h3>
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<span style="font-weight: 400;">In short - reinvest your dividends. If you start receiving your income well in advance, i.e.; before you need money, then it is best to reinvest in dividend stocks. This one action can add surprising results to your portfolio with minimalistic efforts.</span>

<span style="font-weight: 400;">If not perfect, then for sure dividends provide you with opportunities to beat inflation over time. Any investor demanding a 5% return without any risk involved is surely asking for the impossible. It is like asking for an insurance policy that covers you no matter what will happen! It never happens!! </span>

<span style="font-weight: 400;">Also hiding cash in cases won’t work due to constant inflation. Investment risk in the industry is a must. Investors have to take the risk whether they like it or not. After all, taking risks is the only way to grow. </span>

Dividend Portfolios and Guide to Set-up

Building a dividend portfolio will diversify your holdings and are popular among investors as they provide safe income and return on investments.

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Dividend Portfolios and Guide to Set-up

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