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Which is why dividends exist. Mature companies may grow less, but they produce profit, which can be distributed to shareholders in the form of dividends.
by zip1234 8y ago
Which is why dividends exist. Mature companies may grow less, but they produce profit, which can be distributed to shareholders in the form of dividends.
- avs733 8y agoBut that would require me to own the stock for months or years rather than milliseconds
- oarabbus_ 8y agoDividends are not some magic; they are taken out of the share price. There's not really a difference between reinvested dividends vs. no dividends at all. And non-reinvested dividends are less optimal as you'll pay taxes on them, so you actually have less net worth from collecting and not reinvesting dividends vs. either reinvesting them, or investing in a company which doesn't yield a dividend. It's a fallacy that many people fall for though. See Berkshire Hathaway for the prime example.
- nradov 8y agoSome public companies choose to return cash to shareholders through share buybacks rather than dividends because it's more tax efficient.
- ataturk 8y agoI don't know who is doing your taxes, but dividends, whether reinvested or not, are taxable in taxable accounts. Might want to look into that.