Why Investors Shouldn't Care About Dividend Stocks
While dividends can't be ignored as part of a total return strategy (dividends plus capital gains), there is a lot of confusion surrounding the supposed efficiency of a portfolio comprising only dividend-paying stocks. Let's explore what's actually happening when you receive a dividend -- and whether it really matters if you receive one at all.
A dividend is nothing more than a return of capital in the form of cash. You won't need to actively sell any shares to receive a dividend -- instead, you'll receive a cash deposit to your settlement fund once a quarter. Psychologically, this feels great: You received money and didn't have to sell any shares. It feels like your money is paying you.
Source Fool.com
