3 Reasons To Buy Dividend Stocks
james is considering investing in the stock market because he wants to grow his retirement portfolio while earning extra income at the same time. he decides to buy stocks of companies that pay a dividend. james knows that purchasing dividend paying stocks carry several advantages. first, dividends can give his portfolio a boost and cause his investing return to increase. dividends have ? contributed to the long-term return of the stock market. this means there is potential to make money buying dividend stocks. secondly, dividends can help to reduce james' overall tax liability to the federal government. his dividend income will be taxed at the rate that's less than his ordinary income tax rate of 33%. thirdly, his dividend income will help him to navigate the storms of the fair market. dividend paying stocks tend to offer income during ?. james knows that dividends can provide him cash to keep a flow when the stock market is sinking. by investing in stocks that pay a dividend, james is able to rest easy. he has added current income to his bank account and there is potential for the shares to rise in value. the share prices of these stable dividend stocks may not grow as fast as the growth stock, but the income ? dividend payouts make ? potential return.