Dividends and Left Hand Turns

We all approach intersections differently, yet we all know the rules or we could not pass the drivers licence test. To turn left is the biggest challenge people tend to face particularly if it is a busy intersection. Some people will confidently approach the intersection, bide their time and make the turn as it was a normal part of driving. Others will approach the intersection and only want to turn on the green light if the way is absolutely clear – which is near impossible because it is a busy intersection. Others behind them will become frustrated as noted by their reaction after they turn – they step on the gas to make up for lost time. In addition to the vehicles, the other players on the road are people and bicycles and each of them at times make up their own rules. The cyclists using the pedestrian crossings, the people walking not following their rules. Together it can be a complex problem to solve, although it sounds simple.

Linking to dividend paying stocks, there are similar characteristics to investing as driving. Some are too confident, the market will teach you humility. Some are too cautious, although that can be a good strategy. As many times of drivers, there are investors and as long as the drivers end up home safely that is what is important. One method to get the best of both worlds is buying profitable stocks that pay a dividend. For the cautious, the dividend and on going profitability are the keys. For the too confident check out the ten year records of many mutual dividend funds – they tend to be higher than great performing funds one year ( then is when people should have sold) which lose money the second year (this is when many people sell), your average return was lower than the dividend fund.

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

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