Why Dividends Don’t Matter

John Noonan Uncategorized

“It is an extra dividend when you like the girl you’ve fallen in love with.” –Clark Gable If the late great actor is correct, then he found a use for dividends, at least in love. The dividends in your investment portfolio, on the other hand, are quite useless, contrary to popular beliefs. Those popular beliefs are: that dividends increase returns, and that dividends are a sound income strategy. We’ll debunk both, to prove our assertion. First, a simple example of how a dividend works, to explain the return issue: John owns a share of stock in Company A, which is …