Dividend Investing

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Dividend Growth Investor  4 hrs ago  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...
SeekingAlpha  9 hrs ago  Comment 
By Left Banker: While I'm not vigorously bearish, I'm inclined to think a market slowdown is something to be expected in the near- to mid-term future. As I described in a previous article, I've been looking at defensive income strategies for that...
newratings.com  Apr 4  Comment 
For filings with the FCA include the annex For filings with issuer exclude the annex +------------------------------------------------------------------------------+ |TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARES(i) ...
newratings.com  11 hrs ago  Comment 
newratings.com  Apr 3  Comment 
To:                THOMSON REUTERS From:            New City High Yield Fund Limited Date:             3 April 2014 Net Asset Value The unaudited net asset value (NAV) of the Company is noted below in pence...
SeekingAlpha  Apr 2  Comment 
By Joseph Y. Calhoun III: By Jeffrey P. Snider There are certain compounds that just do not go together without creating volatile reactions. These binary substances, when mixed, are exceedingly dangerous under even stable conditions. It seems...
newratings.com  Apr 2  Comment 
To:                THOMSON REUTERS From:            New City High Yield Fund Limited Date:             2 April 2014 Net Asset Value The unaudited net asset value (NAV) of the Company is noted below in pence...
SeekingAlpha  Apr 2  Comment 
By Betalyst: My first article on AllianzGI NFJ Dividend & Interest Premium Common Fund (NFJ) was published on November 10th, 2013, and in that article (article found here) I highlighted a couple of considerations before buying more of the closed...
newratings.com  Apr 1  Comment 
To:                THOMSON REUTERS From:            New City High Yield Fund Limited Date:             1 April 2014 Net Asset Value The unaudited net asset value (NAV) of the Company is noted below in pence...
newratings.com  Mar 31  Comment 
To:                THOMSON REUTERS From:             New City High Yield Fund Limited Date:              31 March 2014 Net Asset Value The unaudited net asset value (NAV) of the Company is noted below in...
newratings.com  Mar 28  Comment 
To:                THOMSON REUTERS From:            New City High Yield Fund Limited Date:             28 March 2014 Net Asset Value The unaudited net asset value (NAV) of the Company is noted below in pence...




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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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