web analytics
August 29, 2015 / 14 Elul, 5775
At a Glance
Blogs
Sponsored Post


Three Reasons To Buy Dividend-Paying Stocks

Doug Goldstein

Have you thought about investing in dividend-paying stocks? As the name suggests, these are stocks that pay out a certain percentage of the company’s earnings as a dividend periodically (usually quarterly) to the investor. Recently, dividend-paying stocks have received a good press in publications such as The Wall Street Journal. Have you considered why dividend-paying stocks might be good for you?

Here are three possible reasons for thinking about dividend paying stocks:

1. You can reinvest the dividend payments in the same stock. Chances are you originally bought the stock because you believed in the fundamental strength and stability of the company. As long as you continue to believe in the strength of the particular firm, if you reinvest your dividend income in the company and continue to buy more shares of the same stock, you will increase your position in a company that you believe is strong. If you choose carefully, your investments might turn out like those of Grace Groner, a secretary at Abbott Labs. Her $180 investment in 1935 eventually grew to $7 million (which eventually went to fund a foundation to benefit students of Lake Forest College.)

2. Dividend-paying stocks have the potential to maintain a certain amount of stability when the market gets rough. Stocks that pay dividends are generally considered safer in a down market because they still keep a certain level of value and generate income in the form of a regularly paying dividend. Even if the stock value drops, unless the board of directors vote to eliminate the dividend, you can still anticipate receiving a periodic check.

3. The need to pay out dividends to shareholders can keep a company’s management in check. If the board of directors knows shareholders expect a dividend on a regular basis, they may be more likely to avoid embarking on risky projects that could end up fundamentally destabilizing the company. Since stockholders will only continue holding onto their shares if they believe in the fundamental stability of the company, both the board of directors and shareholders have a common interest in furthering the company’s profits.

If reading the above has convinced you that to buy dividend-paying stocks for your portfolio, wait a minute before you call me (or your broker). First, read my next post, to learn about potential problems with dividend-paying stocks. As always, don’t invest in anything until you get proper advice from a licensed financial advisor.

About the Author: Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd, a financial planning and investment services firm located in Jerusalem. He specializes in working with clients who live outside of the United States and want to maintain a U.S. brokerage account. Doug’s newest book, co-authored with Susan Polgar, about how using chess strategies to improve your finances, Rich As A King can be purchased at www.richasaking.com. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts held at Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. Neither Profile nor PRG gives tax or legal advice. Before immigrating to Israel, it is advisable to consult with a tax attorney who is knowledgeable about Israeli law. Contact at doug@profile-financial.com

The author's opinion does not necessarily reflect the opinion of The Jewish Press.

If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

No Responses to “Three Reasons To Buy Dividend-Paying Stocks”

Comments are closed.

Current Top Story
Swiss Amb. to Iran Giulo Haas presents his credentials to Iranian Pres. Rouhani
‘US and Iranian Cartoon Doves’ Shown Defecating on Bibi by Swiss Amb to Iran
Latest Blogs Stories
haredim-no-women-allowed-sign

The Halacha of shmirat einayim (guarding one’s eyes) is incumbent on the MAN; it’s his obligation

Doug Goldstein

Dem. presidential candidate Doug Shreffler talks about his campaign & its motto “as good as it gets”

Jewish Press Blogger, Jordana Brown

I’ve decided to move away from my safety net-and I wouldn’t change that decision for anything.

Was “Jerusalem” the song Matisyahu planned to perform? It was the PERFECT response to BDS campaign

If the world’s winds of hatred bring Jews to Israel we are ready, joyfully offering them a home here

At what age should the realization start setting in for kids that we live in an uncertain society?

Spain’s SeaWorld canceled Zionist-spy dolphin’s performance unless it supports a Palestinian state

How does the Iranian deal affect anti-terrorist legislation adopted by a number of US states?

Shabbat afternoon soccer games, a tradition in Israel’s league, may become a thing of the past.

Calling the Jewish Press‘closest thing to a frum English-language weekly’ insults the publication

So long as Jews dance for the sheer pleasure of thanking God, Israel will never be defeated!

Why are wealthy people less likely to gossip? So if you get rich you’ll cut down on Lashon Hora!

Matisyahu was bounced from a music festival because he wouldn’t sign pro-BDS, anti-Israel manifesto.

Danon is still young, perhaps one day he’ll succeed Bibi. Representing Israel in UN is good training

I think it has been a major tactical mistake for Israel to consider Iran a particularly Israeli problem. And it is of crucial importance for Israel and Israelis to stop thinking that we have any influence on international leaders when it comes to anything, including international policy re: Iran. That’s why I think that Yair […]

More Articles from Doug Goldstein, CFP®
Doug Goldstein

Dem. presidential candidate Doug Shreffler talks about his campaign & its motto “as good as it gets”

Doug Goldstein

How does the Iranian deal affect anti-terrorist legislation adopted by a number of US states?

Why are wealthy people less likely to gossip? So if you get rich you’ll cut down on Lashon Hora!

What has made Israeli innovative startups world leaders in high tech?

Author Gail Reynolds offers great advice for Mom’s wanting to build a business around their families

How can you remove anxiety and worry from retirement planning?

What is peer-to-peer (P2P) networking? How does it help you access what you want in the internet?

What is the impact of renouncing US citizenship if you live abroad? Can you visit the US again?

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/three-reasons-to-buy-dividend-paying-stocks/2012/07/18/

Scan this QR code to visit this page online: