Hi friends, Let me know more about divident & growth. In trading i could see these two options in each scheme.

Answer 1

Dividends are payouts which means that cash is drained out of the company's coffers. Now, this obviously cannot be used by the company for its expansion and modernization. However, in the event of dividends not being declared and paid out, all cash earnings remain with the company for possible use for its expansion, diversification and modernization plans. It is plain that all these plans are engines of 'growth' and are funded either by internal resources or external resources. Earnings retained by avoiding dividends constitute a major chunk of internal resources to finance growth. Hence, dividends and growth, in a sense, could be inversely related and could even be mutually inconsistent, other things being equal. In fact, there is a debate between dividends and growth as prime movers of stock values on the market. One view says that it is the dividend payout which affects values and the other contrary view supports growth as the basic factor in share values on the market.

Answer 2

Very simple.

Dividend is what a company gives out every year from the profits they earned.

Growth is what happens as a result of a successful product/service, which is why the stock price goes up.

Lots of stocks are good at giving dividends. Others are good at Growth, and then there are many Blue Chips that do both. Lots of people like Growth only when they are young. As they get older, Dividends become important.

If you are under 40 then go for more growth type of stocks. If not, then mix it up. If you are over 60, then go for dividends only.

Good luck.

KKP_Investor