Dividend Investing

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newratings.com  11 hrs ago  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:               30 September 2014 Net Asset Value The unaudited net asset value (NAV) of the Company...
Motley Fool  Sep 30  Comment 
Looking to invest in a high yield stock? How does a 9.75% dividend yield sound? Read on to learn more about why BreitBurn Energy Partners L.P. is a great stock for dividend investing.
newratings.com  Sep 29  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:                29 September 2014 Net Asset Value The unaudited net asset value (NAV) of the ...
Benzinga  Sep 29  Comment 
After five years of near-zero interest rate policy and several rounds of quantitative easing (QE), a sell-off in junk bonds is gaining momentum. Capital inflows into junk bond portfolios and high yield ETF's were very robust until the Federal...
newratings.com  Sep 29  Comment 
WASHINGTON (dpa-AFX) - General Cable Corp. (BGC) announced that in light of current market conditions it has decided not to proceed with the previously announced offering of $250 million of senior unsecured notes due 2019 at the current...
SeekingAlpha  Sep 26  Comment 
By Andrew Sachais: High yield credit has been heavily sold off in recent days as many expect the Federal Reserve to raise rates before next summer, leading investors to dump positions. iShares iBoxx $ High Yield Corporate Bond (NYSEARCA:HYG) has...
newratings.com  Sep 26  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:                26 September 2014 Net Asset Value The unaudited net asset value (NAV) of the ...
newratings.com  Sep 25  Comment 
WASHINGTON (dpa-AFX) - Finishing off this week's series of long-term securities auctions, the Treasury Department sold $29 billion worth of seven-year notes on Thursday. The seven-year note drew a high yield of 2.235 percent and a...
SeekingAlpha  Sep 25  Comment 
By AdvisorShares: By: Heather Rupp, CFA, Director of Research for Peritus Asset Management, the sub-advisory firm of the AdvisorShares Peritus High Yield ETF (NYSEARCA:HYLD) As we have written about, historically speaking the high yield bond...
newratings.com  Sep 25  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:                25 September 2014 Net Asset Value The unaudited net asset value (NAV) of the ...




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Overview

Dividend investing focuses on selecting solid companies that pay a regular and growing dividend. Investing for dividends in the U.S. has been gaining in popularity since The Jobs and Growth Tax Relief Reconciliation Act of 2003 created qualified dividends, which are taxable at a 15% federal rate or 5% for taxpayers in the two lowest tax brackets. Many other countries, such as Canada, have preferencial income tax treatment for dividends earned.

As noted in the article Seven Important Reasons for Dividend Investing , stocks that pay dividends provide several advantages over those that do not, including:

  1. Dividends provides stability to your investment
  2. Dividends can't be manipulated or faked
  3. Dividends provide continuous feedback
  4. Reinvested dividends provided a significant portion of the historical equity returns
  5. Good dividend companies grow their dividends
  6. Spending dividends in retirement, does not harm your principle investment
  7. A dividend portfolio is relatively low maintenance

However, as with any investment, there are some cons as well. These include:

  1. Dividend payments are not consistent. They can change and should not be relied on as a guaranteed paycheck. If a company becomes less profitable, payments may decrease or be suspended altogether.
  2. Payments are still subjected to income tax.
  3. At the end of the day, dividend stocks may not yield as much profit to investors as common stock investors.
  4. When the yields rise in the market for other shares, stock prices may go down as companies compete for investors.

References

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