This is a story of patience and attention to detail, where small differences in the short term add up to massive divergence over decades. In the end, the biggest winners don't always deliver the fattest share-price returns.
Let's have a look at high-yield favorite Southern Copper (NYSE:SCCO). Buying the miner's stock five years ago would have kept your returns apace with the Dow Jones Industrial Average (DJINDICES:^DJI) -- with a side of prescription-strength antacids:
Ho-hum. But that's not how most Southern Copper investors treat their shares, is it? This is what happens when you reinvest the double-digit dividend yields along the way:
Can you say "game changer"? An annualized straight-up return of just 1% skyrockets to 7.6%, juicing your returns something fierce even during these lean years of macroeconomic pressure.
Stretch the timescale a bit, and you'll see that Southern Copper has yielded about 10% per year over the last decade. That takes the already fantastic 30.8% 10-year annualized return up to a dividend-boosted 40.4%. At that pace, the payouts more than double your return over a decade. I recommend sitting down before peeking at the next chart.
That's just one of the many tricks dividend investors keep in their bag, along with these:
Time and DRIP strategies can also lift mediocre returns to reasonable wealth-creation: Verizon's (NYSE:VZ) plain 10-year returns are a near-flat 5%, but a reinvested Big Red portfolio grew 79%.
Turn losers into winners, like the curious case of Annaly Capital Management (NYSE:NLY). Ten years of amazing payouts turned a -16% loss into a 149% gain.
You can even mitigate total disasters. Frontier Communications (NASDAQ:FTR) is a lousy 4% gainer since 2002 -- with dividends reinvested. But without that payout, you'd have lost 59% of your investment instead.
Fool contributor Anders Bylund has no positions in the stocks mentioned above. Check out Anders' bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Annaly Capital Management. Try any of our Foolish newsletter services free for 30 days.