Earlier this week, as the author was coming to an intersection the light changed to yellow, which meant as a walker and given the width of the street, my forward progression was stopped. An added attraction was the sun was shining, making the wait more comfortable. At the same time, the driver of a sports car revved up its engine, pushed down on the accelerator and made the turn as the light changed to red. Since the act of turning was down safely, the issue is should the driver have stopped or attempted to turn? In all likelihood, many of us have turned our vehicle on a yellow light, and at times it seems to be the only method to actually make a  turn. However, in many of those instances the vehicle is generally stopped in the middle of the street and the yellow allows for space to open up. In this instance, there was plenty of time to stop.

Linking to dividend paying stocks, the driver of the car given the ability of the car to accelerate quickly, likely has driven through many yellow lights. Both the ability of the car and driver allow it to happen, at times the police may give the driver a ticket. but that is a risk factor the driver is willing to take. For dividend paying companies, there always needs to be the ability to drive quickly or respond to their competition, but most of the time, the companies and their owners stop at the yellow and wait. Partly because they can wait an extra minute or two and partly because the safety factor of the risk-reward system is always higher on the scale. We all take risks, some of them seemingly self inflicted, the question is how often and to what scale. If you fashion yourself as going through the yellow lights, then growth stocks would appeal to you more. If you generally stop at the yellow then a consistent dividend paying stocks that grow over time is a better investment.

There are more questions than answers, till the next time – to raising questions