There are many who claim to be knowledgeable about investing in the stock market. Claiming and proving are very different things. Additionally, it can be worrying to put your hard-earned cash into stocks if you’re not sure how much you can lose or how soon you’ll need to access your money or the rate of return you’re hoping for.
Know Your Risk Tolerance
The stock market can feel like the wild west, particularly if you’re hoping for big gains. Most market investments will offer gains over time. How long do you have until you need to access the funds? Only you can determine how much money you have to invest, what rate of return you hope for, and when you will need cash.
Dividend Stocks Vs. Cash Payout
A stock dividend is a payout that comes back to an investor in the form of additional stock, rather than in cash. If buy and hold is your long-term strategy, as it should be if you want to make money in the stock market, then dividend stocks are a critical part of your portfolio for long term growth.
How to Get Cash from your Dividend Stocks
If your goal with your stock investing is cash far in the future, dividend payouts are an ideal vehicle. If you choose to cash out your dividend stocks, be aware that this process will take time. Additionally, the value of your dividends on paper will be more than the cash payout.
When a company issues a dividend payout, they are increasing the number of shares available, but not the value of the stocks in the near term. A dividend stock boosts your ownership percentage on paper while protecting the company’s cash reserves.
You will need to set up an Automated Clearing House, or ACH, payment to get the cash out of your dividend stocks. Be aware that the sale date is fixed and may not be quick. Also note that the value of your dividend on paper and the eventual payout will be different. The value in cash will be less and there may be fees for the transfer.
Money Map Press
When a company issues a dividend stock payout to shareholders, there is no income tax on the dividends until the stock is paid out in cash. Experts with Money Map Press remind investors that, while stocks can be turned quickly for strong gains, most stock market investments offer the benefit of slow growth over time. Chasing volatility in the market can make you rich, but it can also be extremely risky.
Uncertainty in the economy leads to volatility in the market. The stock market drops on rumor, often quickly, and rises in fact, often slowly. Subscribers over at Money Map Press can gain a lot of factual information that will allow investors to tap into coming market gains.
No matter your investing goals. knowledge is power. If you’re in the market to invest for your future and that of your family, you will need data to make good choices. The MMP can help you build a portfolio that will grow in the time that you have.