web analytics
November 27, 2014 / 5 Kislev, 5775
At a Glance
Blogs
Sponsored Post
IDC Herzliya Campus A Day on Campus

To mark IDC Herzliya’s 20th anniversary, we spent a day following Prof. Uriel Reichman, IDC’s founder and president, and Jonathan Davis, VP for External Relations, around its delightful campus.



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.

SocialTwist Tell-a-Friend

Current Top Story
Betar soccer fans pour out on the field at Jerusalem's Teddy Stadium, where Hamas planned to carry out a mass-casualty attack.
Hamas Planned Massive Attack at Teddy Soccer Stadium in Jerusalem
Latest Blogs Stories
Ferguson, Missouri: rioting against racism, encouraging murder

The malicious manipulation of frustrated fury is surely as egregious as merely perceived racism.

About 7 in 10 Americans view Israel favorably – making Israel the only positively viewed Middle East country. But the younger Americans get, the more they like some Arab countries.

Undoubtedly, once he’s “former president Obama” he’ll join anti-Israel Jimmy Carter against Israel.

train track grafitti

The silly people on the left have created a new campaign to try and force the rest of the country to capitulate to their suicidal fantasies, this time by riding trains and imposing themselves onto other people’s conferences.

Doug Goldstein

Find out how to set goals and take better care of your finances.

As events over the last couple of weeks amply demonstrate, the status quo isn’t working out either

Australian Ambassador to Israel ran to the hospital in J’m to visit the wounded and to donate blood

Those celebrating violence with “No Justice No Peace” signs are opposed to both justice and peace.

Pop quiz: The shortest book ever written? “Palestinian History and Positive Contributions” text book

We are the continuing generations from our Father Avraham who was given this Land by our L-rd.

When a country supports ($) the PA or Gaza or “recognizes,” “Palestine,” they promoting terrorism.

There is no question whatsoever that Odeh was behind the fatal bombing of a SuperSol market in 1969

As we Jews returned to the Holy Land and prayed at our holy sites, forces fighting holiness came too

Channel 10 TV published on Sunday a poll they commissioned asking Israeli Arabs a rather straightforward but important question:

Today”s discussion: “The effects of current geopolitical situation around the world on investing.”

According to PM Netanyahu, the bill would enshrine full equality under law to all Israeli citizens.

Master Sergeant Zidan Saif (Zt”L) a Druze from the Galilee, was shot and killed saving Jewish lives.

More Articles from Doug Goldstein, CFP®
Doug Goldstein

Find out how to set goals and take better care of your finances.

Doug Goldstein

Today”s discussion: “The effects of current geopolitical situation around the world on investing.”

Discover the world of NY high society and its intrigue.

Lear the the secrets of self-publishing your book from, expert Hank Quense

Why is good financial communication so important in marriage? And the dangers of credit cards.

How much control do banks and governments have over money and what should their function really be?

Doug addresses the question, ” When should one start claiming Social Security?”

When is it a good idea to accept a “draw” and when is it better not to do so?

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: