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Investing For Dividends

By Jim Berg & Marcus Padley 19 Feb 2012 11:30 PM

 Several brokers have commented recently on some great dividend paying companies. One stated that the banks were such great companies to hold over 2011 as “where else could an investor get such a great return?” 

So let’s have a close look at the return from holding the ‘big four’ in 2011 and the ‘income’ generated. And keep in mind that many ‘expert analysts’ believe that equity investment should be focused on growth. 

We’ll assume that a conservative investor took the ‘expert advice’ and purchased an equal dollar amount of the four major banks on the first trading day in January 2011. They held the shares for the entire year and collected the dividends.

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Jim Berg and John Atkinson are Authorised Representatives (AR Nos. 322724 and 1251439) and ShareTradingEducation™.com Pty Ltd (“STE”) is a Corporate Authorised Representative (CAR No. 322726) of Longhou Capital Markets Pty Ltd, Australian Financial Services Licence AFSL 292 464. Examples from the Australian and USA markets are provided to demonstrate that Jim Berg’s principles may be used globally. This educational material is from an Australian source and complies with Australian law and not necessarily any other (local) law. Direct investing in the stock market can result in financial loss. STE products have been prepared for the general information of investors and do not take into account the investment objectives, financial situation and particular needs of any particular person. Persons intending to act on information in STE's products should seek professional advice to confirm that the investments or strategies mentioned are appropriate in the light of their particular investment needs, objectives and financial circumstances prior to taking any action. Refer also to the full Customer Caution Notice in our Terms and Conditions.