Dividend Paying Stocks

There are three very important dates to remember when regarding dividend paying stocks.  Those dates are the declaration date, date of record, and payment date.  By knowing these dates, you will have an edge on the market by knowing the best stocks to invest in.

The declaration date is when the board of the company decides when they are going to pay the shareholders.  This date is then set in stone and they are liable to pay the stockholders on that date.  They are required to pay on that date after it is declared.

The second very important date dealing with dividend paying stocks is the date of record.  The date of record is the date at which you have to own a share of stock in order to be paid a dividend.  If you purchase stock after this date you will not be paid a dividend.

The third and final important dividend payment date is the dividend payout date.  The dividend payout date is when you get paid from dividend earnings.  The dividend earnings are based upon the company’s distributed earnings.  Shareholders get a certain percentage that was agreed upon by the board members.

It is important to know that dividend payouts are taxed just like your regular income as capital gains.  There are many options to choose from when choose this form of investing basics.  You could spread out the risk with a mutual fund, invest in foreign securities, or you simply purchase the individual stock.

Remember to pay attention closely to the three dates regarding your stocks.  If the date of record effects your purchase of a share negatively avoid this company until the following year.  Declaration dates are happening all the time so watch the news and find out what would benefit you best in the longer term.

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