Dividends and the Old Car

A family member, similar to many readers has an older make vehicle which runs well and over the years has performed good service. In terms of economic value, as the vehicle ages, its value goes down. At some point, from an economic point of view, the family member should buy a new vehicle rather than put money to fix it up.

Similar to many people, the family member has grown attached to the vehicle and is not considering replacing it, even though there could be better in the marketplace. Bridging to the world of investments, because people are human, forms of attachment are made to the company. Reading the annual report every year familiarises yourself with the management; you may use the product or services; and many companies sponsor good works in the community.Possibly as an investor, you see the name of the company you own shares supporting the same event you support, the attachment grows stronger. When do you sell the investment? when you grow attached, the decision becomes a little harder, not impossible just harder. For an easier decision making process,  dividend paying stocks, as much as the attachment grows if the dividend is not paid, you can easily sell and move to something better in the marketplace..

There is always more questions than answers, till the next time  to raising questions

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