The Dangers of a “Participation Trophy” Economy

Editor’s Note: In today’s rising interest rate environment, the search for higher-yielding assets is critical to your financial future.

In the article below, our friend Marc Lichtenfeld, the Chief Income Strategist at The Oxford Club, reveals two stocks paying handsome dividends that can help you survive in the current environment.

He also recently put together an ULTIMATE Dividend Package for you.

It’s completely FREE.

Check it out by clicking here.

Happy trading.

– Ryan Fitzwater, Associate Publisher


You know the expression “When the going gets tough, the government hands out free money”?

No? Well, that should be the saying these days.

The government has gotten into the ugly habit of handing out money to citizens anytime things get a bit unpleasant.

When the Great Recession hit, the government sent out checks – including to people who didn’t need them.

When COVID-19 hit, we got checks from the government. In this case, it was initially a good idea, as the economy had suddenly been shut down, employers were no longer hiring and many needed the government money as a lifeline. However, the giveaway went on way too long. We all know people who decided to stay home, collect their government checks and watch Maury rather than get a job. I mean, I wanted to find out who the baby daddy was too, but I had responsibilities to take care of.

One of the most recent government giveaways was proposed in California. Gov. Gavin Newsom wanted to send every Californian, regardless of their income level, two $400 debit cards to help offset the high price of gasoline.

Newsom also proposed three months of free public transit.

California’s plan would have cost only $9 billion. No wonder it got axed.

I’m all for encouraging the use of public transit. It lightens traffic on the roads and reduces gas consumption. But the idea of everyone receiving free money because gas prices are high reminds me of the participation trophies I had to give out to my daughter’s soccer team.

It’s like no one can handle being uncomfortable anymore.

I’m going to lose some friends here, but if high gas prices are squeezing you, maybe don’t drive a gas-guzzling SUV. There are options out there that are more gas-efficient. There’s something to be said for personal responsibility.

The government’s actions are inflationary. You can’t just keep giving people money and not expect higher inflation.

Perhaps more importantly, it gets people used to the idea that the government is always going to be there to bail them out when things get uncomfortable. That’s not the government’s job.

It’s our responsibility to save and invest for a rainy day so that when things get difficult, we’re still able to meet our obligations.

One day, the government manna from heaven is going to stop. And Uncle Sam won’t be there to bail us out when things get rough. We’re going to have to fend for ourselves.

The best way I know to prepare for a rainy day – without the government holding an umbrella for us and putting its coat over a puddle so we don’t get our dainty feet wet – is to invest in Perpetual Dividend Raisers.

These are stable companies that raise their dividends every year.

Stocks of this kind grow in value over the long term, and the income they generate increases your buying power every year.

With inflation at 7.7%, if you’re invested in a stock like Texas Instruments (TXN) that grows its dividend by 10% or more each year, you’re keeping up with rising prices.

Raytheon Technologies (RTX) is another company with a history of double-digit dividend raises.

And companies that boost their dividends by large amounts aren’t just good for paying higher prices at the pump. They grow your nest egg as well.

In 2013, I added both stocks to the portfolios in The Oxford Income Letter. The Oxford Income Letter portfolios include a lot of Perpetual Dividend Raisers.

Since then, Raytheon has returned more than 400% versus the S&P 500’s 153% during the same period. Texas Instruments has done even better, with a total return of 566%.

At some point, this participation trophy-style economic thinking will swing back the other way and we’ll have to rely on ourselves rather than the government to get through hard times.

When that occurs, you’ll be glad you invested in Perpetual Dividend Raisers. But you need to start today so you can harvest those rising dividends later on.

There’s a Chinese proverb that says, “The best time to plant a tree was 20 years ago. The second-best time is now.”

The same can be said for investing in Perpetual Dividend Raisers. Make sure that you’re already invested in them for when you need the income, safety and growth that these stocks can provide.

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Good investing,

Marc