Dividends4Life: The Basics of Dividends

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The Basics of Dividends

Posted by D4L | Thursday, September 15, 2011 | | 0 comments »

Stop me if you've heard this one. Stocks are stuck in a lost decade. The Dow Jones currently trades at around 11,000. In 2000, it was about the same. A full decade of zero returns. It's a tough statistic to swallow. But it's equally flawed. Add in dividends, and the Dow has actually increased some 43% over the past 10 years.

Albert Einstein called compound interest "the most powerful force in the universe." Dividend investing is powerful stuff that can lead to phenomenal long-term wealth generation. When a business earns a profit, it can do one of three things: keep the cash in the company to expand operations or repair its balance sheet, repurchase shares, or pay a dividend.

Source: Motley Fool

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