Investment Portfolio Sample


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Investment Portfolio Sample

Investment Portfolio Sample

Novice investors are intimidated by them. Veteran traders find them boring. But every investment portfolio needs dividend paying stocks.

For those who are new to the world of stock analysis, a dividend is a regular, generally quarterly, payment to shareholders of certain publicly traded companies. If you buy shares of a dividend paying company on an exchange like the NYSE, the company will pay you a dividend of anywhere from 0.5% to 10% of your investment, depending on the company's dividend yield. Large cap and mid-cap companies with reliable revenue streams often pay dividends to shareholders. Smaller publicly traded companies with less consistent earnings generally opt to reserve their cash to expand their businesses.

As dividend paying stocks don't often offer the outsized gains of fast-growing small cap companies, experienced traders sometimes perceive dividend yielders as dull. But dividend paying stocks are an essential component of any investment portfolio. Because they tend to trade in a narrower range than other publicly listed companies, stocks with a dividend yield provide stability to your investment portfolio in turbulent markets and faltering economies. Furthermore, dividends comprise a significant percentage of the total return of the market as a whole over longer periods of time.