Dividends can be a great perk of a healthy company, but don’t become overly excited by them because they do not necessarily mean a healthy stock.
What Are They?
- A payment every quarter of the fiscal year.
- If a company is producing x every year, you get paid out 3 or 4 times.
- You can change the payout rate if you are a major shareholder.
- Most are paid out every 4 months
- You can get paid in: cash, stock bonuses, or more shares
- Amateur traders love dividends
- Not every stock pays out a dividend
- Stocks fluctuate and if the stock declines you may get your dividend, but you still lose a portion of your investment
- Don’t choose stocks just because they offer a dividend.
- You want a stock that is in an appreciation
- A dividend should be viewed as an added perk of a healthy company (if you hold onto stocks longer than a quarter)