Get Paid While You Wait

Equities have a history of providing positive returns over the long term, but in the short term, it’s nice to have investments in your portfolio that can generate steady income — get paid while you wait. Bonds are often relied upon for tried-and-true income generation, but with interest rates at historically low levels dividend-paying stocks offer compelling advantages of their own.
For one thing, they allow you to participate in the growth of the market with less risk than other equities. Whereas non-dividend-paying stocks need earnings growth and investor optimism to support their price, the prices of dividend-paying stocks are usually supported by their own quarterly dividends.
When the price of a dividend-paying equity falls, its dividend yield rises, which tends to attract buying interest from income-seeking investors. Indeed, this phenomenon helped some dividend-paying shares outperform their non-dividend-paying counterparts over the past year.
Another powerful benefit of dividends is the potential for generous after-tax returns. Interest income is like employment income—every dollar is taxed at your full marginal rate. Dividend income, on the other hand, is eligible for a Dividend Tax Credit when it is received from a Canadian corporation.

Additional Articles on The Power of Dividends


Important Information | Privacy Policy | Legal | Security | Adobe Reader
Copyright ©2018 The Bank of Nova Scotia. All Rights Reserved.
Web services provided by The Iconic Group

® Registered trademark of The Bank of Nova Scotia, used under licence. ™ Trademark of The Bank of Nova Scotia, used under licence. Scotia Wealth Management™ consists of a range of financial services provided by The Bank of Nova Scotia (Scotiabank®); The Bank of Nova Scotia Trust Company (Scotiatrust®); Private Investment Counsel, a service of 1832 Asset Management L.P.; 1832 Asset Management U.S. Inc.; Scotia Wealth Insurance Services Inc.; and ScotiaMcLeod®, a division of Scotia Capital Inc. ("SCI"). Wealth advisory and brokerage services are provided by ScotiaMcLeod, a division of SCI. Insurance services are provided by Scotia Wealth Insurance Services Inc., the insurance subsidiary of SCI. When discussing life insurance products, ScotiaMcLeod advisors are acting as Life Underwriters (Financial Security Advisors in Québec) representing Scotia Wealth Insurance Services Inc. SCI is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.