The Truth About Dividends

[Bill Lussenheide]

President Bush has proposed dropping the taxation of dividends paid to
shareholders of stocks. Is this proposal one that only benefits the rich?
Just what is a dividend anyway, and are there other far reaching benefits
that such a tax cut would produce for the health of the economy? Just what
is the Plain Truth of this issue?

Dividends are payouts from earnings that are paid in cash to shareholders of
common stock. The ratio of this payment to the stock price is know as the
Dividend Yield. Historically (since 1926) , nearly half of the total return
of the stock market was from the dividend yield. This return has been as
important as price appreciation. On average the dividend yield has
approached 5% historically, with a yield as high as 7.5% in 1950. As
recently as 1990, stocks were yielding 4% on the Dow Jones Industrial
Average. Since 1990, yields have consistently dropped and are now
historically low at approximately 1.5%. Is there a reason why??

Read more about dividends, their benefit to both company management and the
majority of the American public and how eliminating taxation on their
payment would benefit the majority of Americans and also YOU as an investor
in my article at:

http://home1.gte.net/res0uuwy/index.htm

In addition you can read my current market commentary and the status of my 7
market timing models.

I'm looking forward to your visit!

Bill Lussenheide