Dividends: A Bright Spot In a Bleak Time

In the midst of all of this financial and stock market turmoil my portfolio is now yielding a whopping 4.8%. This compares with my 4.1% yield on cost (income/price originally paid for equities). That is equivalent to $2,094 per year, or $5.74 per day. This is about 69% more money than we were collecting at this time last year. About 13% of my portfolio holdings are invested in dividend re-investment plans [DRIPs], where the dividends automatically buy more shares quarterly.

With the $700 Billion bailout being announced in the U.S., and confidence in most markets jumped off of a cliff months ago; it is important to note that the largest U.S. retail bank near the epicentre of the crisis, Bank of America (BAC) just paid us our $19.68 dividend last Friday. Dividends can remind us sometimes that life goes on despite the bleak news and outlooks.

Also, introducing Dividends Anonymous, finally there's an online refuge for those of us who are addicted to dividends. I've been officially branded a 'dividend addict' over there.

Comments

[Dividend Gr...:]

Richard,

Just because financial stocks got all the publicity with their dividend cuts does not mean that all dividends were cut this year. Do not base your investment decisions based off recent news or you will fail to see the big picture.

2008 Sep 29 10:33 AM

[userb:]

With the purchase of Merrill after the first of the year, BAC will have to slash the dividend.... but you do get to enjoy one last dividend payment.

2008 Sep 29 11:26 AM

[nyka:]

Dividends are the name of the game...period. If I'm investing in a company, I'm using my hard-earned capital to do so. Don't insult me by offering nothing in return except the "possibility" of a stock increase. That simply won't cut it. Show me the money....quarterly or monthly. I'll take both.

2008 Sep 29 01:10 PM

[bill d:]

Oh yeah - your YIELDS are going up. Why - cause the stock price is going DOWN. Why - because things aren't looking real good. Now expect your whopping dividends to go DOWN.
Your BAC really increased your yield today. I sold a 35 put a week or 2 ago for 1.50. Got exercised - already got the dividend and made about $5/share. Doubt I would see that sort of profit any time soon.

2008 Sep 29 02:54 PM

[moneygardener:]

Saying that my yield is going up is not an accurate way to represent anything. My yield on cost will only go up if the companies that I own raise their dividends or I buy more at depressed prices. I don't really expect my income from investments to decrease, at the very least it should grow more slolwly than it has in the past. This will give me an opportunity to buy more shares at depressed prices.

2008 Sep 29 09:32 PM