Kudos to those who answered false. Those who didn’t may be guilty of what researchers call the “free dividends fallacy”.
Sure but that's not the point being made in the article.It is not in the interests of the shareholder for the company to retain earnings if it cannot deliver at least as good a return as the investor could get else were
No, that's not the point being made - I don't think anybody would suggest that dividends aren't a significant component of the total return on stocks.his bogus point about dividends being of no real NET benefit
That's just mental accounting. Just because you like to think of it like that doesn't make it so.dividends to me are about being paid to wait for ( hopefully ) capital appreciation
No, that's not the point being made - I don't think anybody would suggest that dividends aren't a significant component of the total return on stocks.
That's just mental accounting. Just because you like to think of it like that doesn't make it so.
The same as what?well i guess im just stupid then , is rent each month on a BTL the same ?
The same as what?
That's true Duke but I think you might be guilty of confusing correlation with causation.I am not sure I would answer False to (A). Take the dot.com bubble. Those stocks were quite the opposite of dividend paying. They were a punt on huge future growth.
is the principal of receiving an income from investment property by way of monthly rent not the same as a dividend when it comes to stocks ? ( useless )
Five years is a meaninglessly short time frame in terms of stock market returns. Also, why would you compare one (relatively concentrated) regional index with a global index in trying to prove anything?I can show you a graph of global dividend index Vs. Euro Stoxx 50 over 5 years. It outperforms the latter, without factoring in dividends.
Do you? To test, state if the following statements are true or false:
(A) Dividend-paying stocks are less risky than non-payers;
(B) Like bonds, they offer free annual income as well as the potential for capital growth;
Consider a company whose shares are priced at €1. It decides to pay its investors a 3 per cent dividend annually. On the date the dividend is due, the company will distribute €3 to a shareholder with 100 shares and the share price will drop by the amount of the dividend paid, to €0.97. What’s the difference between this and a non-dividend paying company whose share price remains at €1 throughout?
Here's a link to a video that might help.read the irish times article again , i still dont get it
I would have thought so but a lot of people don't seem to grasp the point - often to their detriment.This is just a statement of the blindingly obvious.
I think we must take the article as being addressed at the layman who after all hasn't a clue about these things. I think it's a bit condescending for us know alls on AAM to lambast it. The general thrust that, contrary to intuitive first thoughts, one shouldn't seek out high dividend stocks is valid.
I would have thought so but a lot of people don't seem to grasp the point - often to their detriment.
Incidentally, I don't think it's just investing novices that fail to understand the issue.
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