The latest thing "conservative" brokers are preaching these days is to buy stocks that pay dividends. Everyone likes dividends. I know I do Nike Air Force 1 Clearance Sale , but when Wall Street tells me something I am automatically suspicious because they lie to me every day. Is this a new scam? Let's take a look.
When you buy a bond or a CD at the bank it pays interest and is a real dividend. You might get a check every month, quarter or annually or receive a credit to your account. The amount of your principle (what you paid for it) remains the same. Yes, that is a true dividend.
Companies make big splashes about raising their dividend. It was 50 cents per share Cheap Nike Air Force 1 , but we have raised it to $1.00. Big deal. Yes, you will receive a check and at least you know the company has cash available to pay you. That is an indication the company is in good financial condition, but there have been many of the big names on the NYSE that have continued dividends even when they have lost money. How can that be?
Currently Microsoft has announced a dividend of $3.00 per share. The talking heads on CNBC-TV tell us they are loaded with cash and want to distribute it to their stockholders. Many people buy the stock in anticipation of the dividend as they think they will be getting an extra $3.00 per share. They are in for a big surprise.
The day that dividend is paid Microsoft stock (symbol MSFT) will automatically drop $3.00 per share. Today $27.00; tomorrow $24.00. Folks Nike Air Force 1 Sale , this is NOT a dividend. This is a distribution of capital. You are being paid in your own asset. The fool that believes the Wall Street mumbo-jumbo will not have one extra penny after the dividend than he did before. In fact he will have less. Why?
The stockholder will now be allowed to pay income tax on the "dividend" distribution. To make that "dividend" seem even better the Bush administration has reduced dividend taxes from 38.6% to 15%. Thanks, Mr. Bush. Thanks for nothing. I can't blame him for more Maul Street smoke and mirrors. He has just made it cost less to get back your own money.
Companies seldom pay large dividends and they are paid quarterly. A $30 stock that pays a 4% dividend ($1.20) on a quarterly basis shows a decrease in the stock price that day of 30 cents per share and is lost in the noise of trading. Few notice that part of the price change is due to the "dividend".
When you own the stock of any company the most important criteria is to find one that is in a long term upward trend. Never buy a stock that is showing a decline no matter how "good" the company may be. Even sideways movements should be avoided. Keep in mind you are buying the stock to make money. Forget the dividends and all other "reasons" and remember if it isn't going up, don't buy it!
F*R*E*E investment letter. Copyright 2004 Albert W. Thomas All rights reserved. Author of "If It Doesn't Go Up Nike Air Force 1 Cheap Outlet , Don't Buy It!" Comments to al@ Former 17-year exchange member, floor trader and brokerage company owner. An untrained eye would see the contents of the bags and plastic vials as useless waste or everyday mud and rocks even. With such specimens originating from the Larsen Ice Shelf in Antarctica the scientists will truly be kept busy for long. One mud sample, according to a college senior Nike Air Force 1 Clearance , can lead to a multitude of information. A one month trip to Antarctica was funded by the National Science Foundation and the participants, including this college senior, belonged to the chosen university and college group. For these schools Cheap Nike SF Air Force 1 , traveling for research is something ordinarily done.
The first part of the expedition aboard a research vessel was departing from Punta Arenas Chile in early February. The Larsen Ice Shelf became their destination and it was uncharted territory on the east of the Antarctic Peninsula. It has been said that they were the first explorers to reach that place. While the boat moved slowly, sonar was utilized