A bird in the hand is worth two in the bush…

A bird in the hand is worth two in the bush…

— Geraldine Weiss

The importance of dividends in determining value in the stock market cannot be overstated. The main reason investors are willing to risk their capital in anything is to get a return on their investment. In the real estate market, that return is rent. In the money market, it is interest. And in the stock market, it is a cash dividend.

Folks who ignore the importance of dividends in making stock market selections are not investors. They are speculators. Speculators hope the price of a stock will go up and reward them with profits. Investors know that stocks that pay dividends go up too. Meanwhile, they are getting a return on their capital. They believe the old adage: A bird in the hand is worth two in the bush”

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