Stock Investing Basics: Dividend Stocks ? Top 5 Reasons to Own ...

Sign up for the tutorial series ?The FAST Approach? at: stockinvestingsimplified.com High dividend-paying stocks with solid fundamentals are one of the safest and fastest ways to generate a solid return in the stock market. Here are the top five reasons to own dividend stocks 1. Dividends cushion the stock price Yield support of the dividend which is the stock?s annual dividend divided by its share price creates a cushion against selling pressure as the stock price trends lower. A lower stock price causes a higher yield thereby encouraging value-oriented investors to step in and offset the selling. During a general downturn of the economy or a major stock market correction, those companies offering safe dividends find themselves better protected relative to the whole market. 2. Dividends protect you from short sellers Short selling is the selling of a stock that the seller has borrowed from a broker in anticipation that the stock price will go lower. If the price drops, the short seller can buy back the stock at the lower price and make a profit on the difference. A high dividend protects you from short-sellers, who are more reluctant to borrow money from a broker knowing that they are responsible for paying the dividend to the investor actually owning the stock. This scenario cuts into their potential profits. 3. Dividends generate quarterly income The income you can receive from a decent yield can be significant, especially for retirees. A big advantage is that the ?

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Stock Investing Basics: Dividend Stocks ? Top 5 Reasons to Own

Source: http://www.bizways.net/2013/01/stock-investing-basics-dividend-stocks-top-5-reasons-to-own/

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