Buying stocks themselves – the basis of dividends
Although not every company's stock will pay dividends, they are things to consider when buying stocks. There are a number of advantages to paying dividends in your portfolio.
What is the dividend first? In short, it is part of the company's profits to its shareholders. An obvious point here is that dividends are paid only when the company makes a profit. This is not to say that all listed companies are making money. Profits not paid to shareholders are called retained earnings. In addition, companies may pay dividends on a monthly or monthly basis. For this reason, dividends are generally calculated on an annual basis.
As dividends are part of the profits, the amounts paid are different each year and dividends are usually paid in cash Of the online brokerage accounts of miraculous shareholders. Some companies that pay dividends on a regular basis will offer a so-called dividend reinvestment plan (DRIP). Many investors believe that DRIP is the key to a successful portfolio, especially for buying and holding investors.
Dividend reinvestment plan is a plan whereby a company allows stockholders to buy small amounts of shares automatically using dividends. Usually this is paid without commission. As mentioned above, this is a great program for long-term investors. Using DRIP allows investors to accumulate stocks at no additional cost, thereby averaging their total investment over time.
Paying stocks can be an excellent way to generate regular income for investors who are close to retirement or retired dividends. As long as the dividend as income, you can offset the pension or other pensions. It is prudent to remember what has been stated, which is profit-dependent and varies greatly from year to year. The best dividend is for large companies, blue-chip companies.
Please carefully read the financial statements when considering the purchase of shares by companies that do not pay dividends. Ensuring that companies use their retained earnings to reinvest companies through new projects or other forms of expansion. If not you will need to consider whether the company is worth the investment you make money hard