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Originally Posted by lewdog
Things to keep in mind.
1. 1. There is absolutely no legal obligation for any company to pay any dividends to its share holders. Stop buying penny stocks, thinking they'll never cut their dividend.
2.Percentage of dividend paid by any company is, in no way, any indication of the quality of the company. Just from dividend yield we cant say whether a company is good or bad.
3. Dividends are basically the part of profit or "cash in hand" which a company shares with its shareholders. Dividends come off the share price.
4. One of the best known company "Berkshire Hathway" owned by Warren Buffet, one of the richest men on Earth, has to date paid dividend only once in almost 50 yrs. Still it has given great returns to its share holders without a dividend!
5. The stock price of the company giving dividend gets reduced by exactly the same dividend amount on the record date ie the date when the dividend is actually provided. Hence, it does not have any material impact on your overall finance due to dividends. You can absolutely lose money on a dividend stock that's share price sinks.
MOST IMPORTANT FOR ALL TO READ
If you are an aged person or need more a pension kind if income, high dividend yielding stocks can work for you, while if you are young who want to grow your capital, so buy high growth low dividend stocks.
Lastly, a company which does not provide any dividend to shareholders but keeps investing in its products and factories leading to expansion and higher profit is far better than companies which are just doling out dividends but are not growing enough. But best are the companies which are growing quite fast and still paying out reasonable amount of dividends. Overall annual returns MUST be calculated to determine if a dividend paying stock is worth your purchase, you must not solely focus on the % dividend amount.
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Hey Lew, this will piss you off....
I bought a couple shares of SPYI. It's an income fund that sells options on their holdings for cash flow. I didn't feel comfortable with the Tesla or ARK funds. Apple was intriguing, but the SPY looks better to me.
Interestingly, it doesn't ONLY sell covered calls. It does call spreads, which probably nukes a lot of the return, but it's supposed to participate in some of the upward movement if there is any. I'm guessing the price will go nowhere, and the only return will be dividends.
Interesting read...
https://seekingalpha.com/article/460...ng-income-play
I'm guessing the price will go nowhere, and the only return will be dividends, like JEPI.
Whatever, bought a couple shares to keep an eye on it.