You’ve done your research. You’ve identified a great company. You decide to purchase 1,000 shares of a company currently trading at $30/share paying a $1.50 dividend (5% dividend yield).
3 Possible Outcomes:
🎢 The stock appreciates to $40/share. You have substantial price appreciation, and you continue to receive your $1.50 dividend/share or $1,500/year of dividends.
↔ The stock moves sideways. You do not have any price appreciation, but you continue to receive a 5% dividend.
⬇ The stock price drops. This is where most people get discouraged. This is where I get excited. I have done the research and identified a great company. Now, I can reinvest my dividend and get a 6% dividend by purchasing new shares. Hopefully, over time, price appreciation will happen.
Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.