MarketWatch Interviews Me on Dividends

Lawrence Carrel, author of “Dividend Stocks for Dummies,” advocates for dividend-heavy portfolios, saying volatile markets are a ripe time to pick paying stocks. With stock values unpredictable, investors find comfort in knowing that they will at least be paid the dividend even if they lose out on stock value, he said.

“More people want the income from dividend stocks now… they’ve had an awakening,” Carrel said. “They are not gung-ho about growth anymore.”

In his book, Carrel outlines several myths that investors harbor about dividend-paying stocks.

Myth 1: Avoid dividend-paying stocks in volatile markets

On the contrary, Carrel sees rocky times as the right time to invest in stocks where you can recoup profits without selling the shares.

“In general, it’s a little less risky,” Carrel said. “There’s the idea that if I’m going to be in an environment and I can’t be sure where the stock price is going to be, at least I will be able to walk away with profits from dividends.”

For the full article go to MarketWatch.

Pittsburgh Learns About Dividend Stocks

The Pittsburgh Post-Gazette published a story about dividend investing today. Dividend Stocks for Dummies was mentioned and I was quoted.

The Post says, “Retirement is supposed to be about financial security, which explains why many senior citizens are leery of putting too much faith in an up-and-down stock market. But safe investments, such as bank CDs and government bonds, hardly provide enough income to keep up with inflation.

Larry Carrel, author of “Dividend Stocks for Dummies,” said in the past most stocks paid dividends but dividends fell out of fashion when investors focused on companies that had greater potential for capital appreciation. During the Ronald Reagan administration, he said, tax laws were changed so that capital gains were taxed at a lower rate than dividends.

“So people decided it was better to focus on stock price appreciation because those profits were taxed as capital gains, while dividends were taxed at the same rate as ordinary income,” Mr. Carrel said. “That was the main reason a lot of companies stopped paying dividends.

“By reinvesting the profits instead of paying a dividend to shareholders, it boosted the share price.”

But in 2003 during the George W. Bush administration, the dividend tax was cut to 15 percent, which was the same rate as the capital gains tax, putting dividends and capital gains on a level playing field.

Today, about 72 percent of stocks on the S&P 500 Index pay dividends, Mr. Carrel said.

“Dividends give an investor a portion of the company’s profits now, and [he] can use it any way [he wants],” Mr. Carrel said. “[Investors] get money now instead of having to wait until they sell, and that’s very powerful. You are receiving profits constantly.”

For the full story click here.

The Pittsburgh Post-Gazette story doesn’t mention ETFs, but I will. A great way to get the advantages of dividend investing with ETFs is by purchasing ETFs from WisdomTree. Every ETF launched by WisdomTree tracks an index weighted by dividend payments. This means every single stock in their funds, domestic and international, pays a dividend.

Second Book Put to Bed

Whew!! Okay, I’m back on the ETF beat.

I feel like I’ve just run two marathons with very little sleep in between. I just finished the final edits and put my second book to bed. Dividend Stocks for Dummies will hit the bookstores in April. I expect I will be taking a closer look at dividend focused ETFs now.

 But in the meantime, check out my first book and the inspiration for this blog, ETFs for the Long Run.

Bell Ringing At the Nasdaq Stock Market

ETFs for the Long Run gets the royal treatment on the Nasdaq Stock Market's 7-story high tower screen in Times Square. New York City.

To honor the one-year anniversary of the publication of ETFs for the Long Run, I”m a publishing the photos from my biggest media event.

My friends in and out of the ETF industry join me as I ring the Closing Bell at the Nasdaq Stock Market Aug. 19, 2008

Last summer, to help promote the publication of the book and in appreciation for telling the Nasdaq’s influencial part of the history of the ETF, I was invited to ring the closing bell on Aug. 19, 2008.

I've just received the Nasdaq's highly coveted blue glass award for effectively closing the market that day from Richard Keary, former managing director of Nasdaq's exchange-traded products business. Without me, people might have traded until midnight.

Why publish these now? Well, at the time this occurred I  just started the blog and didn’t have the hang of it yet. Then the financial world blew up.

My friends and I in the middle of Times Square. When the Nasdaq's behind you like this, you know this is an important book. What are you waiting for? Order a copy now.

A few weeks later, I had the “good fortune” to have my book hit the bookstores the week Lehman Brothers went bankrupt. At the time, people were worried about the financial collapse of the entire Western World and the coming of the second Great Depression. So, no one really wanted to celebrate a book talking up Wall Street products. But things are better now. I want a redo.  So, I’m ramping up publicity and this is the beginning.

So long, folks.

Buffalo Gets Turned On to ETFs

The Buffalo News in Buffalo, N.Y. gave “ETFs for the Long Run” and myself a nice writeup in advance of tomorrow’s talk at the University of Buffalo. (In the photo, I’m in the blue shirt.) The News asks “Are exchange traded funds the future of investing?” on top of the fold of the paper’s business section.