Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
WELCOME TO ‘YOUR VIEWS’
This is your platform to talk about key investing issues.
Each week we will pose a question and publish the best comments in a future edition of Shares. You can comment on our Facebook page, send us an email or interact via our Twitter account.
This week’s question...
How important are dividends when deciding whether to buy or sell a stock?
Absolutely vital! I rely on the income from dividend paying stocks in my portfolio. If a dividend is cut you get a double whammy. You lose your income and, usually, the shares fall as well so you have to take a capital loss. If the dividend is cut I’m very likely to sell.
Barry Johnson, via Email
For me it depends. If a company is in a position to pay a dividend, then great but for certain companies I wouldn’t want that at the expense of investment in future growth. Given the returns you get from cash at the moment, there is an argument for the money being better allocated elsewhere.
Frank G, via Email
I prefer dividend growth stories to high yielders. If a company can barely cover its dividend with its earnings, or worse, is forced to dip into borrowings to sustain its dividend then that’s bad news. Better to cut the dividend to a more sustainable level and rebuild.
R Smith, via Email
A big part of my return comes from reinvesting the dividend so the ability of a company to pay a dividend is absolutely vital when it comes to buying or selling a stock
Brian Salter, via Email
Important but I prefer not to take the risk of investing in a company which might then cut its dividend – I prefer income funds where someone does the work for you and you get some diversification.
Michael Hill, via Email
THE BIG QUESTION for next week
Have you made any adjustments to your portfolio since Donald Trump was elected president? If so, feel free to explain your decisions.