A personal finance blog dedicated discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance.


Wednesday, July 27, 2005

The Power of Dividends

I like dividends. I suppose that's why I like TheDividendGuy, a blog written by a guy who also like dividends. Go check out his blog and while you are there, check out this post. I like the way he keeps track of his dividends. Maybe his spreadsheet can help you set up your own tracking system.

One other guy who likes dividends is Jeremy Siegel. His book, The Future for Investors, stresses the importance of reinvesting dividends in a portfolio. He states:

"The power of the basic principle of investor return is magnified when the stock pays a dividend.

Consider this. If earnings are better than expected, that means that the stock is underpriced and purchsing more shares through dividend reinvestment will enhance your returns even more.

Dividends count!

Tags: ,