Many people get into the stock market to build generational wealth. And although nothing is guaranteed, the historic performance of the stock market suggests it is one of the best vehicles to compound returns over time.

There are a lot of different styles of investing. Some folks prefer to target a basket of growth stocks, knowing that some could do quite poorly or fail entirely, but those failures could be more than offset by massive successes.

A far simpler way of compounding wealth is through dividend stocks. Companies that choose to return capital to shareholders through a dividend instead of reinvesting it in the business tend to be safer, established companies with slow and steady growth. Therefore, dividend stocks can be a good option for risk-averse investors or those looking for a passive income stream instead of solely relying on capital gains.

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Source Fool.com