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Subject: The Truth About Dividends


Author:
Lussenheide
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Date Posted: 11:21:06 01/23/03 Thu

President Bush has proposed dropping the taxation of dividends paid to shareholders of stocks. Is this proposal one that only benefits the rich? Just what is a dividend anyway, and are there other far reaching benefits that such a tax cut would produce for the health of the economy? Just what is the Plain Truth of this issue?

Dividends are payouts from earnings that are paid in cash to shareholders of common stock. The ratio of this payment to the stock price is know as the Dividend Yield. Historically (since 1926) , nearly half of the total return of the stock market was from the dividend yield. This return has been as important as price appreciation. On average the dividend yield has approached 5% historically, with a yield as high as 7.5% in 1950. As recently as 1990, stocks were yielding 4% on the Dow Jones Industrial Average. Since 1990, yields have consistently dropped and are now historically low at approximately 1.5%. Is there a reason why??

Read more about dividends, their benefit to both company management and the majority of the American public and how eliminating taxation on their payment would benefit the majority of Americans and also YOU as an investor at:

http://www.investmentwarrior.com

In addition you can read my current market commentary and the status of my 7
market timing models.

I'm looking forward to your visit!

Bill Lussenheide

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