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The dividend coin has its two sides. Payment of these is sign of a company’s maturity, they say – rightly so, but still somewhat ironically. Which side is up, depends of the expectations one buys the shares with.
Editorial: share glee, share gloom
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This year, ten of the 13 groups listed on Tallinn Exchange pay dividends. Good to know, also, that several of these have publicly stated policy thereof now and tomorrow. Both – sharing current gains and intelligible promises regarding the future – boost trust. Trust, in its turn, is a prerequisite for both private persons and institutions to keep investing in corporate shares. In the long run, such interest will raise share sales price, which is surely nice for the small holder.
The other generalised way to look on payments of dividends usually sounds like this: money abounds, ideas do not. Thus saying, critics mean that a company has found no ideas and options to expand, and is not investing its profits into future growth. Lack of growth ambition, if that be the case, is not a too good sign. Especially when considering the rather small size of our listed companies. With a broad stroke: no shining and daredevil optimism showing, but we do have the decent workhorses.
As for the «common man», does it make any sense to invest in companies listed in Tallinn Exchange? When comparing share yields to the current super low deposit interests, small depositors might consider the option.
Herewith, let’s remember what they rattle about medicines, in ads: consult a doctor or a pharmacist. Don’t jump in blindly. Also, don’t hope to get rich quick. As a rule, they say, savings not intended to be used in near future (one, better yet two to five years) might be invested in shares.
The way our people relate to shares might be compared to maniacal depression. We’ve been hit by periods of collective craze, with everyone reading wild stock market stories and believe they’ll strike gold. Both at end of 1990ies and naturally during the financial crisis, folks fell into deep depression and unbelief which will not lift even when sunshine or (at least) variation of cloudiness are objectively being predicted. Let’s take things easier, understanding that investing in shares is just one way, among many, to make our savings grow.