As we all know in 2008 the market tanked. The sky was falling, federal bailouts were the norm, and people were seeing blood in the streets. Lehman brothers failed and went into bankruptcy, Bank of America bought Countrywide (a poor decision) and Merrill Lynch (an even worse one, and in the following years a ton of bank failed. While some can argue that the government forced some of the purchases, Bank of America's for example, this period in American financial history proved to be one of the greatest economic opportunities for us investors if we had had the stomach and the guts to invest during this time period. If I knew then about dividend growth investing what I know now about it, well life would be very different indeed.
So fast forward to post recession economics where once great companies have sullied reputations, auto makers are booming again, and interest rates are still non-existent. Dividend income is where it's at and the once great dividend powerhouses that helped millions work towards financial freedom were crushed. There are times during investing that you have to take a chance and make some smart, educated gambles. So on March 13, 2014 I took a close look at American International Group (AIG) and liked what I saw. To understand why this was a gamble one need only to look at the recent history of this once enviable organization.
American International Group is one of the largest insurers in the world and when the financial crisis hit it was one of the first "too big to fail moves" The federal reserve stepped in and bailed out AIG to the tune of $85 billion and this is when AIG suspended their dividends. To get a better understanding here is a quick breakdown of the events around AIG circling into it's demise: