y so gian about the dividend?
they give you money, XD the share price will drop
they dont give you money the share price wont drop, and you have the option of selling the shares at higher price, anytime you want.
The money is left pocket right pocket.
I rather the company dont give me dividends. If I want dividends i can always sell off a small percentage of my holdings to generate my own dividends anytime. Saves on taxes too.
why hate on dividend stocks?
it is true that when they give money, the share price will drop on XD. when the company gives out 10 cents of dividend, it means that the company de-values by 10 cents.
however, companies do not have to give dividends. companies pay dividends using their profits. so in a way, receiving dividends means that the companies one has invested in is making profits.
dividends are a way of rewarding investors and asking them to stay vested with the company. as long as the dividend payouts are coming from profits and not out of a company's coffers and the dividend payouts arent excessive (and thus leaving no room for growth and expansion), i think dividends are a good thing.
personally, i like to divide my portfolio into 3 broad categories:
1. growth stocks (those i think got potential for huge growth, best if got give abit of dividend, if dont have also not much of an issue. eg. Raffles Medical Grp)
2. income stocks (div stocks + REITS)
3. punting stocks (pennies, just to satisfy my hunger for a gamble
)
