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re: Some common myths about the markets that are untrue and/or 99% do not know

Posted on 4/17/24 at 10:06 am to
Posted by LSUcam7
FL
Member since Sep 2016
7908 posts
Posted on 4/17/24 at 10:06 am to
quote:

they have decided for you that you should reduce your investment in them


Ehh... You’re missing the point that people buy equity for different reasons.

Some prefer a mature company that has solidified itself in its industry. One that creates shareholder value through cash flow. Ideally, said company pays a dividend and increases the dividend to defend against inflationary effect, something bonds, generally speaking, cannot do.

The dividend investor should know the position isn’t a massive growth opportunity. But not everyone needs to reach for growth, some need income now.

You’re seeing tech companies begin to pay a dividend because some of them are maturing themselves. The rates are low because the valuation on some of these tech giants are extremely high, unlike some traditional dividend payers where valuations are more in line with historical norms.
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