Dividends and Wheels

As an adult, most of the time when a book is desired, it comes from the adult section of the library or the book store. Recently time was spent in a public school with grade school books. One of those books was about Wheels and the pictures and the story was if you look closely at mechanical objects around you, they are not as complex as they look to be. The basic building blocks often are wheels. If you look towards the basic building blocks of machines, you can understand how they work and maybe even fix them.

Linking to dividend paying stocks, similar to everything else in this world, subjects can be complex. There are reasons for the complexity, but to understand is to bring back to the basic. How does the company make money? What is its margin? How consistent does it make money? As you understand how the company makes money and can it continue to make a profit, then investing becomes easier. There are basic building tools for every industry, with investing there are basic rules and one of them should be try not to lose money. One easy method to try not to lose money is to invest in companies which make money and continually raise their dividends.  Companies which make money are more valuable than ones that do not, and it is good to have a couple of measuring sticks – can the company raise its dividend? yes keep, no look for alternatives.

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

 

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