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Boston ITer · Guest

What I like about high dividend equities, see Tobacco, is that they're kinda like being a part-business owner where your stake in the firm generates an income stream.

So typically, if you buy at the right time, meaning during a sideways channel of secular bear market, that you get an income stream for that entire period, while it chops up and down, and one only worries about the cap gains, when one sells it, at a much later bullish cycle up.

balor123 · Joined: 08 Mar 2008 Posts: 1204

Dividends aren't very tax friendly though. What would be better is if the company saved the cash, causing the stock price to go up, allowing investors to sell their shares for higher values but only paying capital gains taxes.

GenXer · Joined: 20 Feb 2009 Posts: 703

Boston ITer: It would help to purge the technical analysis terms from our vocabulary, unless you want to have people mistake you for a financial shaman Wink

Just because you add an X% dividend on top of a random process with potentially 'turkey-like' characteristic (i.e. at one extreme - company goes belly up, and a milder one - business falls apart and dividends are reduced or eliminated) doesn't make it a good investment.

admin: You are 100% correct! There is absolutely NO WAY that I can know that in the future the stock market will outperform anything at all! In fact, this is what I've been trying to say all along. In THE PAST the stock market outperformed any other 'asset class' out there. The past is past. In the future, we can not know that the stock market will outperform. But I still believe that given the right tools we can use some elements of the stock market to outperform most other investments available to us, when factoring taxes, fees, commissions, etc. I think we just need to use the right recipe for this to happen, and not to forget other investments as well, money permitting.