You'll do better with high dividend stocks, as market may remain rangebound for years

Discussion in 'Stocks' started by crgarcia, Jan 5, 2009.

  1. Stocks aren't undervalued yet, they are fairly valued (Dow PE 13).

    Stocks may remain rangebound (over a wide range, however).

    So, over many years, you'll do better with high dividend paying companies?
  2. dividends are a wash. you buy a $25 stock that promises a $1dividend and when they pay the dividend they reduce the price of the stock $1. you end up with a $24 stock and a $1 dividend.
  3. kxvid


    buy FRO FTW
  4. Are you even vaguely familiar with intraday trading? Rangebound markets are GREAT for daytrading because you get both up and down gyrations. Even if the indeces remain relatively unchanged at the end of the day, what takes place WITHIN the day is where lots of money can be made.

    Think outside the box will ya

  5. Only in an arbitragable dividend capture would that be largely true. Over the long haul it's unknowable what the net ROI will be. Your hypothetical $25 stock could be zero or it could be $50. It could continue paying a buck or go to a larger dividend or it could cut the dividend all together. Obviously this sentiment will be reflected in the IV of the stocks options price. If consensus is that a dividend paying stock won't rally hard then you'll see traders prefer selling higher yielding puts than buying the underlying.