Most of us are familiar with Einstein's famous quip that compound interest is one of the most powerful forces in the universe. In these days of low interest rates and extreme stock market volatility, this truism may be playing a role in the current infatuation with bonds and other long-term interest-bearing instruments. But Einstein had it wrong. What is true about interest can be even more true for stock dividends.
The threat of inflation highlights the advantages of dividends over fixed-rate interest. During inflationary times companies experience inflation-related earnings growth as currencies fall. This should cause their stocks to rise and allows them to increase nominal dividends. Fixed-rate bonds, by contrast, decline in value. In fact many blue-chip equities yield more than long-term Treasurys.
Source: Forbes
Related Articles:
Dividend Stocks For Fixed Income Investors
Posted by D4L | Monday, November 22, 2010 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
If you've been holding back from investing in your future just because you don't have a lot of extra cash to spare, I've got gre...
-
If you are looking for high-yield dividend stocks that can beat the market, you might want to check out these three companies. They all have...
-
If you are here to build a portfolio that thrives in all seasons, consider dividend stocks. They can generate steady returns and provide sta...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
One way to achieve financial freedom is to create passive income, or income that does not depend on your active involvement beyond a certain...
-
The company's remarkable consistency and low-risk business model make it a "first-choice investment opportunity," according to...
-
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contribut...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.