Dividend investing is a method of purchasing stocks that pay dividends, meaning investors receive a regular income stream from their investment portfolio.
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Dividend investing is a method of purchasing stocks that pay dividends, meaning investors receive a regular income stream from their investment portfolio. The income you receive is additional to any growth as stocks or other holdings increase in value.
Dividend investing has long been considered a sensible way for people to build their capital over a long period. The impact of compound investing is truly staggering, and it can make fortunes from relatively small, but regular, contributions. However, the trick lies in starting as early as possible, as dividend investing is a long game.
When a company first goes public, they’re usually young and looking to grow their business. Whereas, once a company has been listed for many years it’s less likely to grow, so it rewards loyal investors with dividends. Established companies such as these are attractive for having a less volatile share price, and the dividend is a bonus.
How dividend investing works
As mentioned previously, dividend stocks are usually offered by established companies who are less likely to grow as a way to reward loyal investors. Dividend investing is a good strategy for investors who are looking to create an additional revenue stream. Dividend investing gives investors two sources of potential profit.
A predictable and regular income in the form of dividend payments and capital appreciation of the stock over time. Dividend stocks are often favoured by risk-averse investors as they tend to be less volatile.
To give an example of how dividend investing works, let’s say you buy 100 shares of a company for £100 each, in turn each share pays a dividend of £3.00 annually. Your initial investment would total £10,000 and over the course of a year you will receive £300 in dividend payments, regardless of whether the stock price rises or falls and as long as the company continues to pay out.
Changes in the economic climate can make it difficult for companies that offer dividend stocks to continue to pay out, something we have seen during the COVID-19 pandemic. Investors can protect themselves against this to some degree by diversifying their portfolio across different companies and sectors. The given example equates to a 3% yield and what you chose to do this return is up to you, you could:
Reinvest the return to buy more shares of the company
Buy stock in another company
Put the money into a savings account or product
Spend the money
There are many companies that offer dividend stocks but some of the most popular include Johnson & Johnson, Coca-Cola, Verizon and Microsoft.
Advantages of dividend investing
There are a wide range of advantages for dividend investing, including:
Benefit from compound investing
The trick to making money from dividend investing is in how long you can leave your investment to compound. A little-known statistic shows that very young people investing for a few years, then stopping, actually end up with a larger capital sum decades later than someone who started at a later age but invested for longer.
Powerful wealth-building technique
Dividend investing can be an effective strategy for growing your wealth. For example, If you save £100 a month for 40 years with a 5% dividend yield, you’ll end up with over £148k. But if you could achieve an effective annual interest rate of 12%, then your final sum would be a whopping £970k.
Alternatively, if you can contribute a lot more each month, such as £500 a month. Then, with an effective annual interest rate of 5%, you’ll end up with £741k. These examples demonstrate that either a high interest rate or high regular contribution can build up to an impressive final sum.
When you look at the rate of compounding, it exponentially increases after a long period of time. Dividend investing can be a strategic, long-term way to gradually build wealth and protect your capital.
Less risks during market volatility
With a predictable and regular income from dividends plus capital appreciation of the stock over time can prove to be a less risky investment option. Building a diverse portfolio could help investors further protect themselves against volatile markets and help them generate a larger revenue stream.
Disadvantages of dividend investing
As with all investments there are always disadvantages and a level of risk involved, when it comes to dividend investing these include:
Still presents investment risk
Dividend investing isn’t free from risk and other savings vehicles and bonds will typically hold their value better, especially during difficult economic climates.
Even established companies go bust
As it is often established companies that offer dividend stocks, investors can be given a false sense of security that the investment they are making is sound. But it is important to remember that even the most established companies can still fall on hard times and in the worst scenario go bust.
Something we have seen during the financial crisis of 2007/8 and more recently during the COVID-19 pandemic.
Dividend policy changes
Many companies that offer dividend stocks retain the right to make changes to their policies and the way dividends are paid. This can include reducing the amount of dividends they pay, such as cutting the payment from 4% to 2%.
If this happens the regular income received from these stocks would halve and in many scenarios the share price would also fall, making it a lose-lose for a dividend stock investor.
BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals.
Credit: Impact Journals
BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals.
Impact Journals will be participating as an exhibitor at the American Association for Cancer Research (AACR) Annual Meeting 2024 from April 5-10 at the San Diego Convention Center in San Diego, California. This year, the AACR meeting theme is “Inspiring Science • Fueling Progress • Revolutionizing Care.”
Visit booth #4159 at the AACR Annual Meeting 2024 to connect with members of the Agingteam.
About Aging-US:
Agingpublishes research papers in all fields of aging research including but not limited, aging from yeast to mammals, cellular senescence, age-related diseases such as cancer and Alzheimer’s diseases and their prevention and treatment, anti-aging strategies and drug development and especially the role of signal transduction pathways such as mTOR in aging and potential approaches to modulate these signaling pathways to extend lifespan. The journal aims to promote treatment of age-related diseases by slowing down aging, validation of anti-aging drugs by treating age-related diseases, prevention of cancer by inhibiting aging. Cancer and COVID-19 are age-related diseases.
Agingis indexed and archived byPubMed/Medline (abbreviated as “Aging (Albany NY)”), PubMed Central, Web of Science: Science Citation Index Expanded (abbreviated as “Aging‐US” and listed in the Cell Biology and Geriatrics & Gerontology categories), Scopus (abbreviated as “Aging” and listed in the Cell Biology and Aging categories), Biological Abstracts, BIOSIS Previews, EMBASE, META (Chan Zuckerberg Initiative) (2018-2022), and Dimensions (Digital Science).
Please visit our website at www.Aging-US.com and connect with us:
Mathematicians use AI to identify emerging COVID-19 variants
Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants…
Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants and could help with other infections in the future.
Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants and could help with other infections in the future.
The framework combines dimension reduction techniques and a new explainable clustering algorithm called CLASSIX, developed by mathematicians at The University of Manchester. This enables the quick identification of groups of viral genomes that might present a risk in the future from huge volumes of data.
The study, presented this week in the journal PNAS, could support traditional methods of tracking viral evolution, such as phylogenetic analysis, which currently require extensive manual curation.
Roberto Cahuantzi, a researcher at The University of Manchester and first and corresponding author of the paper, said: “Since the emergence of COVID-19, we have seen multiple waves of new variants, heightened transmissibility, evasion of immune responses, and increased severity of illness.
“Scientists are now intensifying efforts to pinpoint these worrying new variants, such as alpha, delta and omicron, at the earliest stages of their emergence. If we can find a way to do this quickly and efficiently, it will enable us to be more proactive in our response, such as tailored vaccine development and may even enable us to eliminate the variants before they become established.”
Like many other RNA viruses, COVID-19 has a high mutation rate and short time between generations meaning it evolves extremely rapidly. This means identifying new strains that are likely to be problematic in the future requires considerable effort.
Currently, there are almost 16 million sequences available on the GISAID database (the Global Initiative on Sharing All Influenza Data), which provides access to genomic data of influenza viruses.
Mapping the evolution and history of all COVID-19 genomes from this data is currently done using extremely large amounts of computer and human time.
The described method allows automation of such tasks. The researchers processed 5.7 million high-coverage sequences in only one to two days on a standard modern laptop; this would not be possible for existing methods, putting identification of concerning pathogen strains in the hands of more researchers due to reduced resource needs.
Thomas House, Professor of Mathematical Sciences at The University of Manchester, said: “The unprecedented amount of genetic data generated during the pandemic demands improvements to our methods to analyse it thoroughly. The data is continuing to grow rapidly but without showing a benefit to curating this data, there is a risk that it will be removed or deleted.
“We know that human expert time is limited, so our approach should not replace the work of humans all together but work alongside them to enable the job to be done much quicker and free our experts for other vital developments.”
The proposed method works by breaking down genetic sequences of the COVID-19 virus into smaller “words” (called 3-mers) represented as numbers by counting them. Then, it groups similar sequences together based on their word patterns using machine learning techniques.
Stefan Güttel, Professor of Applied Mathematics at the University of Manchester, said: “The clustering algorithm CLASSIX we developed is much less computationally demanding than traditional methods and is fully explainable, meaning that it provides textual and visual explanations of the computed clusters.”
Roberto Cahuantzi added: “Our analysis serves as a proof of concept, demonstrating the potential use of machine learning methods as an alert tool for the early discovery of emerging major variants without relying on the need to generate phylogenies.
“Whilst phylogenetics remains the ‘gold standard’ for understanding the viral ancestry, these machine learning methods can accommodate several orders of magnitude more sequences than the current phylogenetic methods and at a low computational cost.”
Journal
Proceedings of the National Academy of Sciences
DOI
10.1073/pnas.2317284121
Article Title
Unsupervised identification of significant lineages of SARS-CoV-2 through scalable machine learning methods
While the size of the United States makes it hard for it to compete with the inter-city train access available in places like Japan and many European countries, Amtrak trains are a very popular transportation option in certain pockets of the country — so much so that the country’s national railway company is expanding its Northeast Corridor by more than one million seats.
Running from Boston all the way south to Washington, D.C., the route is one of the most popular as it passes through the most densely populated part of the country and serves as a commuter train for those who need to go between East Coast cities such as New York and Philadelphia for business.
Veronika Bondarenko captured this photo of New York’s Moynihan Train Hall.
Veronika Bondarenko
Amtrak launches new routes, promises travelers ‘additional travel options’
Earlier this month, Amtrak announced that it was adding four additional Northeastern routes to its schedule — two more routes between New York’s Penn Station and Union Station in Washington, D.C. on the weekend, a new early-morning weekday route between New York and Philadelphia’s William H. Gray III 30th Street Station and a weekend route between Philadelphia and Boston’s South Station.
According to Amtrak, these additions will increase Northeast Corridor’s service by 20% on the weekdays and 10% on the weekends for a total of one million additional seats when counted by how many will ride the corridor over the year.
“More people are taking the train than ever before and we’re proud to offer our customers additional travel options when they ride with us on the Northeast Regional,” Amtrak Executive Vice President and Chief Commercial Officer Eliot Hamlisch said in a statement on the new routes. “The Northeast Regional gets you where you want to go comfortably, conveniently and sustainably as you breeze past traffic on I-95 for a more enjoyable travel experience.”
Here are some of the other Amtrak changes you can expect to see
Amtrak also said that, in the 2023 financial year, the Northeast Corridor had nearly 9.2 million riders — 8% more than it had pre-pandemic and a 29% increase from 2022. The higher demand, particularly during both off-peak hours and the time when many business travelers use to get to work, is pushing Amtrak to invest into this corridor in particular.
To reach more customers, Amtrak has also made several changes to both its routes and pricing system. In the fall of 2023, it introduced a type of new “Night Owl Fare” — if traveling during very late or very early hours, one can go between cities like New York and Philadelphia or Philadelphia and Washington. D.C. for $5 to $15.
As travel on the same routes during peak hours can reach as much as $300, this was a deliberate move to reach those who have the flexibility of time and might have otherwise preferred more affordable methods of transportation such as the bus. After seeing strong uptake, Amtrak added this type of fare to more Boston routes.
The largest distances, such as the ones between Boston and New York or New York and Washington, are available at the lowest rate for $20.
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