Assigning some of your investment portfolio to shares of a company is a consideration always worth undertaking.
Where it can get complicated is figuring out which companies you should invest in, and there are many factors to consider. Lots of investors think that any company which pays out dividends is a sure bet.
“There are myriad reasons as to why a company pays dividends”, says Richard Meyer Cayne of Meyer International in Bangkok, Thailand.
“Many investors find them enticing because they perceive them as an immediate reward as opposed to having to sell shares on the market in an effort to turn a profit. Of course, this should not be the only factor to take into consideration when investing.
What are dividends?
Whenever a specific company has considerable earnings, it has the option of sharing those profits with the shareholders of the company, something known as dividends.
Normally, these dividends are paid out in cash, but they can also come in the form of assets, stocks or a combination of all of the above.
A company oftentimes looks like an enticing investment if people see that it can afford to share its wealth, a signifier of its seeming prosperity.
There are, however, many reasons why a company would choose not to pay out dividends.
Certain companies may want to bolster their profits and growth potential, and as such will decide to re-invest their earnings to perpetuate the development of their organization.
Other companies may find themselves in a jurisdiction where dividend payments are considered taxable income, and as such will decide not to pay out dividends in an effort to protect investors from possible capital gains taxes.
Dividends: a sure thing?
It should also be kept in mind that just because a company currently pays out dividends, does not necessarily mean it will always continue to do so in the future.
Regardless of company performance, the board of directors may ultimately choose to not pay dividends, for a variety of potential different reasons.
The decision not to pay dividends also does not necessarily indicate that there’s a problem within the company.
“While receiving a dividend payment is certainly an indication that there is a pay out on your investment”, explains Richard Meyer Cayne, “does not necessarily mean it is the only sign of where you should choose to allocate your money”.
Many factors need to be evaluated if you are to educate yourself further as to a company’s potential and structure. In order to help mold a winning and robust portfolio, it is essential that you consult with a trusted financial expert like Richard Meyer Cayne.
Richard Meyer Cayne
Richard Meyer Cayne of Asia Wealth Group Holdings, the Meyer Group, Meyer Asset Management and Meyer International Ltd has been involved in wealth management planning for decades. Originally born in Montreal Quebec, Canada, he later relocated to Tokyo, Japan for over 15 years and now resides in Bangkok, Thailand. While he runs the Meyer Group and serves as the high credibility CEO of Asia Wealth Group Holdings Ltd, a London, UK Stock Exchange-listed Financial Holdings Company, as well as the Managing Director of the Meyer Group of Companies www.meyerjapan.com. and has additionally been the managing director of multiple organizations that specialize in helping high net worth individuals with succession planning .
Having worked with clients all over the globe with everything from portfolios to bonds to mutual funds to offshore investing to investing in retirement for your golden years, Richard Cayne of Meyer International can help you invest the right way and protect your cash. Richard has been a financial advisor involved in wealth management planning solutions and asset management in Asia for over 25 years and while living in Tokyo, Japan, he assisted many high net-worth Japanese families create innovative international tax and wealth management planning solutions. The financial holding public company of which he is CEO can be seen at Asia Wealth Group Holdings Ltd or the stock exchange link:
Asia Wealth Group Holdings Ltd – Richard Cayne Thailand. Meyer Asset Management Ltd has been in the wealth management space since March 2000 and uses fundamental analysis along with modern portfolio theory.
His image worldwide as a professional advisor has been sterling and he maintains a firm command and understanding of all things finance-related.