web analytics
September 19, 2014 / 24 Elul, 5774
At a Glance
Blogs
Sponsored Post
Apartment 758x530 Africa-Israel at the Israel Real Estate Exhibition in New York

Africa Israel Residences, part of the Africa Israel Investments Group led by international businessman Lev Leviev, will present 7 leading projects on the The Israel Real Estate Exhibition in New York on Sep 14-15, 2014.



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, SIFMA, 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


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.

SocialTwist Tell-a-Friend

Current Top Story
Protest rally against Metropolitan Opera staging Death of Klinghoffer on 9/22 at 4:30 pm at the Met.
For Grass Roots Klinghoffer Protest 9/22, Jewish Establishment MIA
Latest Blogs Stories
Doug Goldstein

Why some countries are more economically successful than others? Tune in for the answer…

ethics

If not scared by God be scared by man; Hopefully ethics will integrate into lives for proper reasons

rgds

Smear campaigns by people with agendas other than justice do not faze him; He does what is right.

Even Muslims -- including a number of groups one might consider to be quite radical -- are distancing themselves from ISIS and declaring the group to be apostate.

Countries like Turkey, Europe and even the US have proven fertile ground for recruiting terrorists

How many times have you heard anti-semites spew words like Israel are Nazis, or what you are doing to the Arabs is worse that what the Nazis did to the Jews?!…

My blog, Israpundit, was hacked, and I had to move to a new domain…

There’s much confusion about the definition of Daas Torah; simply put it means the wisdom of Torah.

We’ll never be able to negotiate a true, lasting peace with the Arabs.Their aim is our destruction.

Now I live in a country where every shop in the food court is kosher! I can have anything I want!

Pashkevil: “Come out today and battle the Zionist Amalek and all the traitors in Nahal Haredi…”

Jordan: Only M.E. country with no historical basis and ruled by occupiers placed by European powers.

Why is an IRA a worthwhile account for retirement? And how can you use it to the best advantage?

Like the fighter pilot’s letter, I wonder if certain units are simply too sensitive to allow certain leftwingers to serve in, and to entrust in their hands the security of our country and our lives.

There is only one thing more tragic than experiencing a terror attack, and that is allowing those who attacked you to do it again!

Smuggling Gazans into Europe is cheaper than fighting with Gaza, and then rebuilding all the destruction.

This week’s parsha offers a new covenant; a covenant that speaks to national life unlike any other

More Articles from Doug Goldstein, CFP®
Doug Goldstein

Why some countries are more economically successful than others? Tune in for the answer…

Doug Goldstein

Why is an IRA a worthwhile account for retirement? And how can you use it to the best advantage?

How do you reach the top of your profession, and are you always aware of your own talents?

How has the sudden growth in modern technology affected world economy and future employment levels?

Learn about Monte Carlo-not the place but simulator forbuilding a financial plan.

This week’s podcast discusses the need for transparency in international business dealings.

Life after 50? You better believe it! Tips on how to prepare and enjoy life after retirement.

Marriage is not just about emotional fidelity but about financial fidelity as well.

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: