Dividend Investing

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newratings.com  Apr 11  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:                11 April 2014 Net Asset Value The unaudited net asset value (NAV) of the Company...
Dividend Growth Investor  Apr 10  Comment 
There are several guidelines about becoming a successful dividend investor. They are centered around several key points I am going to be discussing in the next three weeks. I will be updating this post with links to articles on the process of...
newratings.com  Apr 10  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:                8 April 2014 Net Asset Value The unaudited net asset value (NAV) of the Company is...
SeekingAlpha  Apr 10  Comment 
By Bret Jensen: Tuesday I penned a piece on some of the attractive yield plays available in the booming energy sector highlighting a couple of energy partnerships that paid a 10% distribution yield that looked attractive for income investors. My...
newratings.com  Apr 9  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:                9 April 2014 Net Asset Value The unaudited net asset value (NAV) of the Company is...
SeekingAlpha  Apr 9  Comment 
ByAbba's Aces: The last time I wrote about ConocoPhillips (COP) I stated, "The reason for selling the stock was because it was at its 52-week high and I saw that I would be paying the same now for future earnings as I did for past earnings which...
SeekingAlpha  Apr 9  Comment 
ByMartin Rice: I Never Did It On February 10, 2013, I published Part IV of this series. Bob Wells, in one of his many helpful comments, said: "Develop a business plan for your portfolio clearly defining your criteria for buying, selling or...
newratings.com  Apr 8  Comment 
WASHINGTON (dpa-AFX) - Kicking off this week's series of long-term securities auctions, the Treasury Department sold $30 billion worth of three-year notes on Tuesday, attracting slightly above average demand. The three-year note auction drew...
newratings.com  Apr 8  Comment 
8 APRIL 2014 NEW CITY HIGH YIELD FUND LIMITED (the "company") ISSUE OF EQUITY The Company announces that it has allotted, by way of a tap issue in response...
SeekingAlpha  Apr 8  Comment 
By Bret Jensen: Over the last few days I have highlighted the "Great Rotation" currently going on in the market as well as advocating for high yield plays with reasonable valuations as safe ports in the storm. Both the NASDAQ and the small cap...




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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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