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Dividends Basics: Fundamentals of Dividends

Welcome to Dividends Basics! This lesson will cover the fundamentals of dividends – what they are, how they work, and why they’re exceptionally important. By learning to focus on dividend-paying stocks, you’ll become a better long-term investor, and dramatically increase your wealth in the process.

In Part 1 of this tutorial, you’ll learn the history of dividends and the origins of modern financial markets. The concept starts back in 1602, the year the Dutch East India Company received a charter to engage in the spice trade in India. What does this have to do with dividends? Soon, we’ll show you how the company’s dividend averaged 18% for nearly 200 years!

Next, we’ll get into the nitty-gritty of what exactly constitutes a dividend and why dividends are paid. There are three options for paying dividends, so all three will be illustrated for you. Lastly, we’ll paint a clear picture of the mechanics of dividends.

Dividends Basics Part 1:

In Part 2, you’ll learn why dividends are such a powerful force and why we love to see dividend growth. First, you must learn the advantages to investing in dividend-paying companies. Next, we’ll explain the positive effects that compounding has on dividends. Dividend stocks have an above-average record of generating strong earnings and positive cash flow, which gives them the financial strength to outperform most other stocks.

While it’s true that past performance is no indicator of future performance, the fact remains that one of the best ways to safely grow a portfolio is to seek companies with long histories of paying and increasing their dividends – something we preach every day at Wall Street Daily.

Dividends Basics Part 2:

Now that you’ve got a basic understanding of dividends, you’re ready to start investing like the pros. Subscribe today to receive Wall Street Daily’s FREE e-letter and get more tips on how to build your income-generating portfolio so that you can retire in style.