The cost of $1 in dividends is down $2.35 to $24.03 as of June 1st 2012 from a high of $26.38 earlier this year (March 24). The low cost of a dollar's worth of dividends from my list was $17.24 on February 21 2009. It's possible we'll hit this low price for dividends again. Why?
We are back in the cyclical bear market. Actually, we never left it. The Fed moved in March 2009 to support 'things'. Hold on tightly. It will be an exciting next couple of years. Before too long we will be able to purchase more retirement income at a better price. I'm working on charts for subscribers to help outline what is likely to happen and how deep 'the dip' will be. The June 2012 Connolly Report will have yield charts and comment for Emera, Telus and Power Corp. The cost of $1 in dividends will be there too.
Here's my current thinking:
- If the stock you are considering for purchase does not pay a dividend, you are speculating, betting that someone else will buy the paper from you at a higher price than you paid. No dividend: no intrinsic value.
- “The discipline of buying only stocks that generate a solid dividend”, Neil Woodward says, ” is a useful one because it tends to steer you away from the frothy, speculative stocks.”