New investors are confronted with a lot of different tips and theories and strategies for choosing the right investments. One oft-heard suggestion is to invest in dividend paying stocks, stocks of publicly traded companies that return some of their profits to shareholders in the form of dividends. And the reasoning behind this strategy is deeper than just, dividend stocks pay you money.
Companies that can afford to pay dividends to their shareholders are also those companies with solid performance over time. They can afford to pay dividends because they are financially stronger and their performance is more predictable than most companies that do not pay dividends. For more on dividend investing, click here.