Really?
Where did you invest to get better returns than this?
https://www.askaboutmoney.com/threa...rty-prices-and-borrowing.133122/#post-1009150
I think this 5k may be changing to 2k from April.But in UK you can earn upto £5000 dividends tax free (i only learned this recently from another poster) which explains why so many people do not pay tax on dividends. Ireland has diverged substantially from UK in terms of taxation over last 20 years, if more taxes introduced in ireland over next few years (which seems to be the trend) there could be big exodus of high skilled people there despite brexit.
Not everyone's in the same boat. I gave up work partly because I was sick of 50%+ tax (though mostly because I wanted to do something else). Now my dividends get taxed at 0-20%, much less than capital gains.
Excellent analogy Galway. Could not actually have put it better myself.
Has every Economic Nobel prize winner ever got it wrong?...
In this case, all other things being equal, the share price would have risen even more if there hadn't been a dividend.
Telecoms have pretty predictable cash generation patterns. Without differing tax treatment, an investor shouldn't care whether excess cashflow is returned to shareholders via dividend or share buybacks (at&t for example does both).
Pension funds don't care about the tax treatment, they invest for total return, and are investing for the positive cashflow generated by the company, not the dividend.
Rather than reading older economic theory by Nobel prize winners, there was a recent paper 'The Dividend Disconnect' which examines the topic and the behaviours of investors. Some interesting interviews of the authors on YouTube to save reading a 60 page paper!
As I have said...
You should stay away from investment if you can't grasp this very, very, simple concept.
Brendan
Maybe easiest if you imagine a company that has issued just one share to a single 100% shareholder. At the start of the year the share (and the company) is worth €1. It makes €2 profit and pays out a €1 dividend. The shareholder now has a share worth €2 (€1 + €2 - €1) and a €1 dividend. If there had been no dividend the share would have been worth €3. There is no magic extra money regardless of whether a dividend is paid.i just cannot get my head around the problem with a ( in my eyes temporary price drop ) dividend payout adjustment
I would be particularly referring to bank shares and not the Iseq overall.
But to tell me that if I do not understand a concept then I should stay away from investment is condescending.
He's not a rare exception Gordon. An exception maybe but so will soon be an exception too. So there are more of us out there than you think.
I don't know if people are just trolling but surely if you don't understand the bare minimum that a companies value will fall by the amount of the dividend payout then you probably shouldn't be investing, although I believe in efficient markets and its probably hard to lose money buying or selling anything liquid enough.
If you believe that the share price doesn't drop by the dividend amount then how have you not seen the massive opportunity of loading up your degiro account and buying the highest dividend paying stocks pre dividend payout and selling straight after they payout so you pocket some quick cash for nothing?
There is no extra money created you can't pay out millions and expect the company to remain the same value this is crazy talk , I mean i'll float my own company tomorrow buy all the shares myself pay myself declare a 100% dividend and double the value of my company overnight , rinse and repeat and I'm bigger than Apple in no time.
its merely a case of saying thank you mr cash dividend and my stock holding should within a few weeks get back to where it was pre ex dividend date
Except the article doesn't actually say that Johnson and Johnson has outperformed Berkshire Hathaway over any reasonable time period. Because that would be patently untrue.Particular reference to Berkshire Hathaway (non paying dividend) v Johnson and Johnson (dividend payer.)
Except the article doesn't actually say that Johnson and Johnson has outperformed Berkshire Hathaway over any reasonable time period. Because that would be patently untrue.
It is certainly true that over very long time periods value stocks have historically outperformed growth stocks and that value stocks, in general, tend to pay higher dividends than growth stocks.
Whether this anomaly will persist in the future is anybody's guess. My own view, FWIW, is that the value premium was at least partly explained by the behavioural biases of individual investors who now make up an increasingly small portion of the market. To put it another way, there are fewer suckers playing the game than was historically the case.
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