To what end should dividends drive an investor to invest? Truly, every dividend has its beginning, friends — at least in terms of how to start buying the stocks that offer them.
Aside from the obvious “which stocks” question, there’s no shame in studying the basics to get there. Answering these questions will help:
— Does a healthy dividend equal a healthy stock?
— How come not all stocks offer them?
— What are those dividend do’s and don’ts?
In basic terms, a dividend is a payment companies extend to shareholders as a result of quarterly excess earnings. And they can fatten portfolios over time. Experts contend that dividends can open the door to reliable returns, with the goodies sometimes streaming in for generations. What’s more, reinvested dividends over time can accumulate a large number of additional shares, which ignite the dividend’s initial value if the shares appreciate.
But before you rush for the nearest dividend gusher, take note that the digits aren’t always what they seem.