From Atlanta Blogs News Source: http://blogs.ajc.com/atlanta-bargain-hunter/2012/12/24/wes-moss-how-dividends-can-affect-share-price/?cxntfid=blogs_atlanta_bargain_hunter
Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly. Wes Moss hosts ‘Money Matters’ Sunday mornings on AM750 and 95.5FM News/Talk WSB. Here’s a common question I get in my role as a financial advisor who advocates income investing, which includes the purchase of dividend-paying stocks: Why do the prices of such shares seem to fall by the exact amount of the dividend they just paid me? As one client put it: “I had a $100 stock and it paid me $1 this quarter. But on the day I received my $1 in cash, the share price went down to $99. Isn’t that company just giving me my own money back?” No; the company actually is passing on profits to you. And you are gaining something. Here’s how it works: On the day the dividend is issued, an investor receives his or her $1, which represents the person’s share of the company’s earnings for that quarter. The company itself has likely ?
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