How to Invest in the Stock Market for Growth and Income
You can invest for growth or for income. You can also do a bit of both as well. Here is how to invest in the stock market for both growth and income. There are certain stocks you will want to zero in on if this is your goal.
It’s usually a competition between the two. You are either investing for growth or income, not both. That is because companies that generally give high dividends are gigantic companies that can’t grow that much anymore. As a consolation to its shareholders and to keep their shares from falling, they give back their earnings in the form of dividends.
Those looking for growth stocks don’t want to invest in a company that gives its earnings away. They want a company that has somewhere they can reinvest their retained earnings. You can clearly see here the tension between the two.
You can have both if you want. If you find stocks where their dividends have been rising over time, they will probably grow in capital appreciation as well.