22thoroughbred

A Dividend Primer, You Don't Get Something for Nothing

I have NEVER been a fan of dividends, why give me back my own money and make it a taxable event (in a taxable acct. of course) I buy 1000 shares of company A at $10 (spending $10,000) they pay a $1 per share dividend and thus reduce the stock price by $1, so now I still have $10,000 worth of assets, but it is $9,000 stock $1,000 in dividend = $10,000 and I have to pay tax on the $1,000 dividend. Too many novice investors don't realize the stock is reduced by the amount of the div. and that's with penny pricing now, it used to be if a co. paid an 8 cent div. the stock was reduced by 1/8th or 12.5 cents, so you would lose money. It was rounded UP to the nearest 1/8th and reduced, so in a year in that scenerio you receive back 32 cents ( 8 cents x 4 divs.) and the stock was reduced by 50 cents (12.5 cents x 4 divs.) No Thanks...