As Interest Rates Rise? Will Dividends Rise? They’d Better Because Savings Accounts will be their new competition – July 14, 2022,
I’m a dividend investor, I’ve ALWAYS been a dividend investor, you pay me to hold your stock, that’s the deal, if you’re unwilling to pay me to hold your stock I’m selling, it’s really that simple. Now, for people looking to make FAST gains, my dividend investing strategy is a HORRIBLE idea, most people invest in stocks to buy low and sell high, sounds like a fabulous idea to me, I do the same thing, I’m subscribed to stock tip sources also, but…
The money I BET on risky stock bets come from my dedication to DIVIDEND investing, I like FREE stocks, meaning I’ll buy a stock with the intention to sell a portion of it when it rises in value, making the stock free and living off the dividend payments. If the company goes bankrupt one day I already made my money and profited handsomely and therefore care little about the bankruptcy of the company.
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I usually monitor dividend-paying stocks and try to buy at the bottom of the market, I win some I lost some, but the monthly, quarterly, semi-annual, and annual dividend payments are worth my while enough to keep pursuing this strategy, even better is that when you own dividend paying stocks, and you have good credit, the bank will often lend you money, which I use to purchase TANGIBLE assets, that also cash flow.
Since “Zero Percent Interest Rate Policy”(ZIRP), the world has gone BONKERS, ofcourse people in Real Estate love ZIRP but I’ve noticed a shift to people investing PURELY for capital gains, even writing books on the topic, the minority make money via capital gains, most people make money via dividends and INTEREST on their capital.
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If you’re not in debt, you should be lobbying to NEVER have ZIRP again, if you’re retired and have NO DEBT, you should be lobbying to NEVER have ZIRP, why finance all of these people to be on welfare? Have crimes gone down since? No, criminality has actually risen, since ZIRP. Nothing good has happened since ZIRP, we have inflated home prices, all sorts of idiots owning property, clogging up the markets, I want ZIRP to die and never come back.
Making matters worse is the effect ZIRP has had on commercial property, commercial leases are VERY important to our standard of living, as an investor in REITS, I want the froth out of the marketplace, there are too many IDIOTS with real estate that I want to be forced to liquidate in favor of more COMPETENT real estate investors, what’s a competent real estate investor? Individual(s) who can make a profit in any interest rate environment.
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All people have the right to have Left Wing views, but ZIRP has given rise to FINANCING for the far left causes, under a normal interest rate environment, it’s not so easy for George Soros as an example to be flush with capital to declare war on Freedom and Liberty. When money is cheap and ASSET prices are artificially high, tyranny gets FINANCED!
When capital is scarce as it’s supposed to be, dumb ideas are QUICKLY exposed for being dumb ideas. Now, why this is important as a dividend investor is that the higher interest rates go, the more money you’ll get in your savings account, meaning that companies that pay dividends will have to raise their dividend to be competitive.
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Now, sure some companies will tell their investors to buzz off, and may even cancel their dividend payments, but as a cash flow investor, you’ll now have more OPTIONS! Most people prefer leaving their money in a savings account anyway. Eventually, companies will figure this out and will likely raise their dividend payments to remain competitive.
Now, could this lead to a recession? Absolutely, as a dividend investor, what you want is AUSTERITY MEASURES the government is WAY too big, write now in my country we have a CARBON TAX? Talk about stupid, the government and the idiots who voted for the government have declared WAR on productivity? That’s how stupid people have gotten under ZIRP.
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Because money is so cheap, a large chunk of people have imagined that money grows on trees and “stuff” just magically appears, who can blame people for thinking like this, people have become so dumb, that they asked the government to be more TYRANNICAL? ENERGY is everything, forget the internet, the lights don’t turn on without ENERGY, and because I’ve visited third-world countries, a lot of developed nations, forget that financial education is indeed an education, because once, costs start to rise, the people who SUFFER are the same people who VOTE for a carbon tax.
By purchasing dividend-paying stocks, I’m allowing privately owned enterprises access to more capital, to INVEST for their future. When the government raises taxes and increases regulations, the government is attempting to reward INCOMPETENT behavior. The cheaper it is for the government to REWARD bad behavior the more bad behavior we’re going to get.
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So for myself, dividend investing is EXTREMELY important, to civil society, because it’s forcing EFFICIENCY, I even invest in green energy companies that are EFFICIENT with resources, green energy companies that can SURVIVE during a recession, WITHOUT the assistance of the government. As rates rise dividend-paying companies will be in competition with savings accounts.
Now, will these interest rate hikes be temporary? I don’t know! but I hope NORMAL interest rates will make a comeback and if you’re NOT in debt, you should want the same thing.
Interesting times ahead
