Nilus Mattive discusses the relationship between dividend paying stocks and the declining dollar. Mr. Mattive takes a closer look at U.S. stocks and how the falling dollar is affecting those shares.

"Dividends can be a great cushion for down markets. They can represent concrete proof that the company's making good money and with every increase, the yield on the original investment can rise as well. And dividends know no borders. Even when the dollar is falling, some U.S. dividend-paying stocks can be recommended," says Mattive.

First, no matter how promising international stocks may be, it's not prudent to put all money overseas. In fact, it's recommended to have at least some money invested in the U.S. at nearly all times.

Never forget that the U.S. is still the world's largest economy. America's public companies are still worth almost as much as all the shares traded on Europe's 24 major markets. And American companies still set the trends and standards that many foreign firms scurry to copy.

What about the falling dollar? A weak U.S. dollar actually helps some American companies that derive a large portion of revenues from their overseas operations. A weaker dollar means companies like Johnson & Johnson collect more dollars on every foreign sale. Moreover, this allows American companies to charge less for their products in foreign markets and still get the same dollar amount in sales. And, Johnson & Johnson has been able to pay out higher and higher dividends for 44 straight years.

Most of the U.S. companies getting the most out of the weak dollar also happen to be the strongest dividend-paying companies in America. Why do the two go hand-in-hand? Because it takes a well-established business to be able to make inroads into overseas markets. And, it also takes an established business to write dividend checks to shareholders.

Continuing with the Johnson & Johnson example, since 44% of its sales are coming from international markets, it's not just benefiting from a weaker dollar. It's also partially insulated from economic weakness in its home market or any single market for that matter.

The U.S. economy might have only increased 0.6% in the first quarter of this year. And, there are many other robust regions of the world that are enjoying tremendous expansion. Plus those large dividend-paying companies are embracing those growing markets with open arms.

Even during a recession, nearly all U.S. consumers still take their medicine, buy groceries, and pay their heating bills. Well-established firms with economically insensitive businesses are the same companies that reward shareholders with regular payouts. The good news is that these companies that have regular payouts can also help your portfolio weather the very same storms. In fact, even when Wall Street hits the skids, dividend-paying stocks hold up far better than shares that don't have yields.

The evidence is abundant, but look at a recent example:

• 2002 was one of the worst years for stocks in decades, with the S&P 500 falling 23%.
• Non-dividend-paying stocks in the index plummeted even more, 30%.
• In contrast, the index's dividend-paying stocks lost only 11%.

"And when U.S. shares resume their climb your portfolio will be ready and willing to move higher, too. First, always keep a nice chunk of change in liquid investments. Second, don't ignore the growth happening overseas. Third, use natural resources to protect portfolios against the falling dollar and rampant inflation. Fourth, don't completely abandon the U.S., dividend-paying companies are a way to stick with the U.S. through thick and thin," according to Nilus Mattive.

For more information and to read the full article, visit this link:
http://www.moneyandmarkets.com/press.asp?rls_id=816&cat_id=6&

About Nilus Mattive and Money and Markets:
Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.