Dividends are voluntary payments from companies to shareholders to enable them to share in the profits. Some companies pay dividends and some do not. Although dividend paying stocks were common decades ago, most investors today hold a basket full of mutual funds and stocks that pay little or no dividends.
Since most stocks just follow the market in general, investors wait for the market to go up so their stocks will go up and increase their net worth. If the market goes nowhere, such as been the case for last 10 years, their stocks and funds go nowhere, and the investor is no better off a decade later. Add in the US Dollar decline and the real losses to your portfolio become even worse. Dividend paying funds and stocks usually move just like regular non-paying stocks and funds which is to say that they will rise in up markets, and go down in down markets. The difference is dividend paying stocks may pay you regardless of which way the market goes.
Source: TheUnion.com
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