web analytics
March 29, 2015 / 9 Nisan, 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


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
PLO / PA / Fatah leader Mahmoud Abbas.
PA Back Down on ICC in Exchange for Frozen Tax Revenue
Latest Blogs Stories
MK Haneen Zoabi being ejected from the Knesset Floor in July 2011. She flew into an uncontrollable rage while the Prime Minister was speaking.

It is perfectly understandable how someone who has no background in Israeli politics could mistake Bibi’s speech as racist…

Moshe Gafni

Israel’s Charedi world is in financial crisis. If the trend worsens it may be their breaking point.

Doug Goldstein

Why do you need to file an FBAR if you’re a US citizen abroad? What happens if you don’t?

heartflag.jpg

Jews caring for one another, that is how I would explain Israel to someone.

As Iran becomes the North Korea of the Middle East, Nasrallah doesn’t understand where all his friends went.

I pray each member of Knesset will represent the interests of the State of Israel & ALL its citizens

At no time did Kahlon say that he preferred to see Bibi in another term as PM-I don’t trust him!

“Israel has nuclear weapons & it isn’t afraid to use them if necessary-Does that frighten you? Good”

American Jews think they know what’s best for Israel-better than Israelis. Here’s my take…

An old Arab man yelled at me “You’re stupid!” I returned the compliment; He had murder in his eyes.

Why do people feel the need to check their email 50X a day, constantly dipping in & out of Facebook?

Betar is the world-wide Zionist youth movement that refuses to be silent, and as our founder Ze’ev Jabotinsky wrote: “Silence is despicable.”

Life in Europe’s pre-War Yeshiva world makes today’s rulings look like the Taliban has taken over.

Moshe’s the 1st family member in thousands of years to have the honor of serving in a Jewish army

Often wig wearers become more attractive after marriage. Doesn’t this turn the intent on its head?

US official interference in Israel’s Elections is not only immoral but may be illegal under US law.

More Articles from Doug Goldstein, CFP®
Doug Goldstein

Why do you need to file an FBAR if you’re a US citizen abroad? What happens if you don’t?

Doug Goldstein

Why do people feel the need to check their email 50X a day, constantly dipping in & out of Facebook?

How can you turn your passion into your business? How can you build your business around your life?

Find out about peak oil and how the production & sale of cheap oil has affected other oil sources

How do emotions affect the way that people make financial decisions?

Doug Goldstein talking to … Doug Goldstein

Discussing the mindset of $ and appreciating its value, and how to develop your inner entrepreneur

Why is it necessary to be accountable in business and in life? And how does it differ from guilt?

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: