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.

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