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Dividend Yields, Risk & Returns

Monday, March 4, 2013 - 12:08 PM
Dear Readers,

Link to a whitepaper that's about a interesting topics:   "Dividend yields", "Risk" and "Returns"!

http://www.globalxfunds.com/DividendsWhitepaper

Yours Truly,
- Anonymous
2
ytytytyt64 posts since
Feb 28, 2013
Rep Points: 197
1. Monday, March 4, 2013 - 3:52 PM
Caveat:

"High yielding stocks are often speculative, high risk investments. These companies can be paying out more than they can support and may reduce their dividends or stop paying dividends at any time, which could have a material adverse effect on the stock price of these companies and the Fund’s performance."

 
2
ShorebreakShorebreak2,365 posts since
Apr 6, 2010
Rep Points: 12,598
2. Monday, March 4, 2013 - 4:13 PM
Dear Shorebreak,

Indeed.

The mutual-fund/ET have no FDIC/NCUA insurance.

The underlying companies can go bankrupt.  If significant number of them in a mutual-fund/ETF go under, then the return can be negative for a very long time.  There is a chance that the value of the holding can be severly down and may never recover at all.  Holder of the mutual-fund/ETF can lose 100% of his/her principal and can receive 0% dividend. It is absolutely essential for everyone to understand this risk, before putting up any money in a mutual-fund/ETF. 

Most of the times higher rewards come only attached with higher risks.  If one wants risk-free rewards, then mutual-funds/ETFs are not suitable.

Yours Truly,
- Anonymous
1
ytytytyt64 posts since
Feb 28, 2013
Rep Points: 197
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