cramer is now saying dividend stocks are the answer to nirvana. i think he is selling his clueless followers another bill of goods. i have never seen the benifit of dividend stocks. at best dividends are a wash short term. whenever they pay out a dividend they reduce the stock price an equil amount so it is a wash. they are just giving you your own money back. i have yet to hear a convincing argument for dividend stocks.
Cramer reduced to hyping dividend stocks now.
- Thread starter Free Thinker
- Start date
Wait till they start cutting dividends...
yes thats the next thing. he was hyping that 4% yield on c when it was 30 something. now its 14. 50% loss on the stock but you got 4% back.
BAC is a good long term dividend play
Harvest Energy Trust (HTE). Its a trust, not a common stock, so its not exactly an apples to apples comparison. Still its yielding nearly 40%! At its current price, its discounting less than $20 oil.
Buy it. Join their dividend reinvestment program. Go to sleep for 10 years. Wake up and send your kid to college w/the proceeds.
Buy it. Join their dividend reinvestment program. Go to sleep for 10 years. Wake up and send your kid to college w/the proceeds.
not unless the stock goes up. do you understand that when they pay a $1 dividend they lower the price of the stock $1? if bac is trading at $25 and they pay a $1 dividend the next day you have a stock trading at $24 and a dividend worth $1.
I agree, except its worse than a wash because you are forced to periodically pay taxes even if you are holding long term.
I also find the whole dividend reinvestment theory equally pointless. If you want to keep the capital invested in the company, you might as well buy stock in a company that has no dividend to begin with, instead of reinvesting after tax.
There was a research note by Ned Davis Research that from 1972 to 2006, non dividend paying stocks returned roughly 4% per year while dividend paying stocks returned over 10% per year.
Ironic Buffet owns dividend stocks but Berkshire doesn't declare one.
Ironic Buffet owns dividend stocks but Berkshire doesn't declare one.
Does that 4% take into account companies such as failed startups, that generally have no dividends and will skew all non dividend paying stocks lower?