Dividend Investing

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To:                   THOMSON REUTERS From:               CQS New City High Yield Fund Limited Date:                18 May 2016 Net Asset Value The unaudited net asset value (NAV) of the Company...
Forbes  May 17  Comment 
Forget fixed income – it’s dead, at least as we knew it. It is still possible to earn secure, meaningful yields – with price appreciation to boot – but it requires a new-look portfolio.
newratings.com  May 17  Comment 
To:                   THOMSON REUTERS From:               CQS New City High Yield Fund Limited Date:                17 May 2016 Net Asset Value The unaudited net asset value (NAV) of the Company...
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To:                   THOMSON REUTERS From:               CQS New City High Yield Fund Limited Date:                16 May 2016 Net Asset Value The unaudited net asset value (NAV) of the Company...
Motley Fool  May 14  Comment 
Put the power of dividends to work in your portfolio. These tips can help you maximize your results.
newratings.com  May 13  Comment 
To:                   Thomson Reuters From:               CQS New City High Yield Fund Limited Date:                13 May 2016 Director Declaration In accordance with Listing Rule 9.6.14, CQS New...
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To:                   THOMSON REUTERS From:               CQS New City High Yield Fund Limited Date:                12 May 2016 Net Asset Value The unaudited net asset value (NAV) of the Company...




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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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