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Without dividends, there's no reward for buy-and-hold investing, and no reason to pick companies that will actually perform well. Instead anyone who buys is gam
by prodigal_erik 14y ago
Without dividends, there's no reward for buy-and-hold investing, and no reason to pick companies that will actually perform well. Instead anyone who buys is gambling that they'll be able to dump their position at a fortunate time, which leaves them dependent on predicting the irrational market's perception of the company's prospects.
- yummyfajitas 14y agoUnfortunately dividends are double-taxed relative to cap gains/interest/etc. Until that's fixed, we won't go back to the era of companies returning money to investors.
- btilly 14y agoCompanies can and do return money to investors through stock buybacks. To first order, it is the same as a dividend, except that only the investors who want money get it.
- yummyfajitas 14y agoTo first order, stock buybacks are equivalent to dividends. To second order, the IRS makes it complicated, as do regulators.
- lifeisstillgood 14y agoWhat - really double taxed ? Do you mean dividends are paid out of post tax cash, then taxed as income for the stockholder? Just wondering