What are dividends? Well, they’re the “vegetables of the investing world”. That gem analogy comes from Rob Carrick of Globe and Mail. Basically, they serve as safer investments in the stock market. Expect to get smaller but guaranteed returns. Many experts believe it to be wise to increase your dividend percentage during bad economic times.
Some view dividend stocks as boring. With such a volatile market, these stocks provide security. Some dividends that increase their pay over time greatly outperform the market. Therefore, it’s important to give dividends a consideration when diving into the market.
The 5 Reasons:
1. Higher yields than bonds
2. Taxed at a favorable rate
3. Relatively less volatile than the stock market
4. Steady payouts
5. Shows that the company has record of being fiscally responsible
Check out MSN Moneycentral for more information regarding dividends.
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