New investors often wonder why companies pay dividends to investors. Given that not all companies are in a position to pay dividends – and even those that can pay dividends sometimes do not – why should a company pay dividends to investors?
This is a very good question.
In fact, dividends are a very “old school” part of any stock investment. A long time ago, most companies paid dividends to investors. That’s the very reason that anyone would ever consider buying a stock that pays dividends. Investors wanted access to the cash flow that a company generated and would naturally seek out the safest dividend paying stocks.
A New Type of Investing
EGShares is a relatively new entrant to the exchange-traded fund industry, but a new fund from the company could prove to be invaluable to long-term investors.
The EGShares HILO exchange-traded fund has a very noble goal—increase the yield available to investors in emerging markets while reducing volatility. The fund seeks out companies that pay attractive dividend yields, while offering the natural growth of the emerging market countries.
The fund also hopes to calm investors’ minds by seeking to eliminate volatility, which typically affects emerging market countries and their respective industries more than US-based equities.
High Yield and Low Beta
It would be hard to ignore what’s happening in modern telecommunications. Recently, ATT decided to go after its rival, T-Mobile in what would be a multi-billion dollar deal. In doing so, it effectively removed one of four of the still remaining cell phone companies in the United States. We’re now left with ATT, Verizon, Sprint (which is in serious financial trouble).
So what’s this mean for consumers? It means we’re going to get screwed. What’s it mean for ATT shareholders? They’re going to clean up!
What Makes ATT So Attractive
Investors face a new reality that they have to prepare for their retirement by investing in the best possible investments with reasonable risk to reward ratios, but they’ll also need to be tax code savvy.
Few things change as much as the tax code, but one thing certainly hasn’t changed: the necessity of tax strategies and their relationship with your 401k and IRA. Read more…
While not exactly a household name, its products surely are. Pfizer is the world’s largest pharmaceutical company, having bought out rival pharma company Wyeth, and small King Pharmaceuticals for a total price of more than $70 billion.
But where investors are starting to get concerned that Pfizer is growing too big, too fast, and simply won’t be able to continue its growth model, it’s starting to look like there is opportunity in investors’ fears. There is no better time to go all-in when other companies are getting cautious.
Cutting Back on R&D
The Federal Reserve has agreed to allow banking companies to bring back their dividend policy, ending a provision that was intended to keep revenue in bank coffers until bailout money could be repaid.
In going forward, the nation’s largest banks, many of which were once some of the highest-yielding firms on Wall Street, may again become high-yielding.