Imagine a stock market where you could only trade twice a week -- where there were so few stocks, and so little volume, that buy or sell orders took weeks to get filled, and stock prices sometimes didn't budge for months. That's life in the nation of Bhutan -- and while it may sound like investor hell to you, it seems to work fairly well for the Bhutanese.

Heaven, I'm in heaven
Bhutan's stock market features four brokers and four computers. Its economy's size is around $1.3 billion, and its total market capitalization at the end of 2008 was around $170 million, with 19 companies traded. That's only about one thousandth of the value of IBM or Johnson & Johnson!

What can we learn from such a tiny market? For one thing, most investors in Bhutan buy stocks and hang on. The majority of them are happy to collect dividends from their investments, since those payouts are more generous than bank deposit interest. Many of us might see better performance from our portfolios if we followed suit.

As we've noted before, a full 97% of the U.S. market's return between 1871 and 2003 came from reinvesting dividends. And between 1926 and 2006, 41% of the S&P 500's total return came not from the price appreciation of the stocks in the index, but from the dividends its companies paid out.

Dividends can be incredibly powerful, delivering effective yields of 20% or more if you hang on to healthy growers for the long haul. Here are some strong candidates for powerful payouts:


CAPS Stars (out of 5)

Recent Yield

5-Year Avg. Annual Dividend Growth

Sanofi-Aventis (NYSE:SNY)




PepsiCo (NYSE:PEP)








Chevron (NYSE:CVX)




Source: Motley Fool CAPS.

The 2008 market meltdown didn't affect Bhutan very much, thanks to the calm nature of its market. The country has not allowed foreigners to trade there, which might be a good thing; welcoming active Americans could introduce a lot of volatility and speculation.

We don't need to move to Bhutan to become better investors, but we might want to consider being more Bhutanese in our investing.

Whether you trade twice a week or twice a year, the right discount broker can make a big difference. Get help making the smart choice.