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"Remember that dividends qualify for the 15% tax rate".
The old paradigm dictated that stocks were a buy when P/E ratios were 13 or less (and many are well above that), dividends at 4%, and book values at 1.3 or less.
The second is that dividends will become much more important.
CLSA calculates that dividends grew by 25% a year between 1998 and 2004 (see chart).
"The bottom line is that dividends are doing extremely well," Mr. Silverblatt says.
This is the first time that dividends have been taxed at lower rates than salaries.
He called such disregard "ridiculous" and predicted that dividends would make at least a partial comeback.
Assuming that dividends are reinvested, the value compounds to $466,000 minus costs.
Arguments that dividends are tax inefficient contributed to their slide from grace.
It is true that dividends, rather than capital appreciation, have provided a big chunk of long-term equity returns.
There is, of course, the risk that dividends will be cut if Britain, or indeed the world, goes into recession.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com