On many streets through the winter, at least in areas where it snows, the snow ends up piled on the road. During the end of winter as the sun shows itself on a regular basis, the snow begins to melt which is great. However the snow which was piled up on the street has transformed from snow to a layer of ice. The ice becomes a barrier for the melting ice and snow to get to the drains on the street, resulting in puddles or mini lakes. The water either has to build up to a large level to go around the barrier or some ice needs to be chopped away before the water can drop. The issue is how much ice needs to be chopped before the water can drain?

Linking to dividend paying stocks, while achieving the highest rate is wonderful, using the analogy of the ice, there is not that much ice and eventually the puddle will dry. The better solution is not to remove all the ice, but some of it allowing for a stream to drain the puddle and continue to allow the remaining snow to melt on a nature control environment. The warming weather will eventually remove the ice. If the solution for the ice blockages is to make path for a stream, then a reasonable and constant dividend policy can be considered the best choice. While you may be tempted by the highest dividend payout ratio, sometimes it is better in the long run to look to companies with a history of paying dividends and increasing them over the years.

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