Passive income: is now the perfect time to buy shares to create a dividend stream?

first_img Andy Ross owns shares in Legal & General, Reckitt Benckiser and Diageo. The Motley Fool UK has recommended Diageo and Softcat. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. “This Stock Could Be Like Buying Amazon in 1997” Andy Ross | Wednesday, 25th November, 2020 | More on: SMT With the stock market recovery under way, now could be the ideal time to buy dividend-paying shares, especially to create a passive income. UK shares, even after recent gains are cheap compared to the US, for example. Dividend yields also tend to be higher in the UK, which helps when it comes to creating a passive income. I’m keen to make use of the current market conditions to build my portfolio further and make sure I’m creating a passive income, so that I can retire early.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The combination of many cheap shares, dividends returning and the government likely to pour money into the economy in today’s Spending Review, all combine to make me think that, yes now is the perfect time to buy shares with future income in mind.But what’s the best way to go about it?Investing for a strong passive incomeI’m targeting companies I think can provide a strong total return. This means listed companies that pay a dividend, but can also grow their share price. I want to avoid value traps, those companies that are very cheap because they face long-term declines in their markets. One example of this would be tobacco.Companies on my radar that potentially meet these criteria and that could therefore help me create more passive income are technology groups like Softcat and FDM Group. I also like Experian because of its growth and income and because fund manager Nick Train has bought-in, He’s a professional I respect.I’ll also likely add to my holdings in Legal & General, Reckitt Benckiser and Diageo as they all strike me as quality companies. They have relatively predictable and high cash flows and profits, factors I like in my income-generating investments.Other optionsIf you want a more hands-off approach, then investing in themes you think could be important over the next decade could be one way to go. You may even go a step further and invest through a trust or fund that looks into future technologies. For example, Gresham House Energy Storage Fund invests in a portfolio of energy storage systems, primarily using batteries in Great Britain. It also pays its dividend quarterly.Another trust that’s very focused on future technologies is Scottish Mortgage (LSE: SMT). It’s a backer of Tesla and other innovative companies. It has a strong track record and experienced managers at the helm. If it can keep successfully backing the companies of tomorrow, investors with shares in the trust could do very well. Indeed, many have this year as tech shares have soared.Overall, I do think now is a perfect time to be investing in shares to create a passive income. I know I’ll keep investing in great UK shares, funds and trusts for the long-term. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Our 6 ‘Best Buys Now’ Shares Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Passive income: is now the perfect time to buy shares to create a dividend stream?center_img Simply click below to discover how you can take advantage of this. Enter Your Email Address See all posts by Andy Ross Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Image source: Getty Images. last_img

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