The recent interest in Canadian dividends and how they may be affected by the price of oil have caused many questions about when you should buy and sell Canadian stocks. Should you invest in Canadian Dividend Stocks? And, if so, when? These are just some of the common questions that investors have been asking as oil prices continue to soar and Canadian dividend stocks have started to rise in popularity.
Canadian Dividend Stocks offer the same shares that are found in the US stock’s market. They differ in that in Canada the dividend payment is tax-free and is exempt from Income Tax. Unlike in the US, there are no minimum distributions, so you do not have to worry about paying any taxes on your Canadian dividend income. There are several different types of dividends offered by Canadian companies. Some of them include common shares, preferred stocks, preferred dividend shares, non-dividend common shares and income yield investment shares.
A common question that you will face is, “what is a dividend?” Simply put, it is money paid out to the shareholder that is received before his or her next distribution. Generally, the dividend is most often from major business corporations that generate the income. One of the benefits of investing in these companies is that dividends are applied directly to their operating funds. This helps to increase their liquidity, which allows for greater risk and potential profits.
One of the biggest benefits of investing in Canadian companies is that the dividends they pay out are exempt from the Income Tax. This allows the investor to lower his or her taxable income and increase their disposable income at the same time. If dividends paid out are exempt from the Income Tax, then any amount of money remaining after the tax is taken is available as a tax-free benefit. In addition, dividends are tax-exempt until they are given away by the corporation in some other way.
What should you invest in? The type of stocks you invest in depends on what your goals are. If you want to make money from the stock market, you should look into the different stocks that are popular in the market. Canadian investments come in many popular sectors including the oil sands, mining, communications, utilities and manufacturing. As you research each sector, you will be able to choose those that are low priced, yet have the potential to grow quickly.
However, if you are looking for an opportunity to get in on the ground floor of a company, then Canadian dividends can be a great way to make that happen. When you purchase Canadian stocks through Canadian companies, you are actually buying shares in the company. This means that as the value of the stock rises, so does your investment. Of course, if the market moves against you, then you could lose a lot of money. It is always important to keep an eye on the market when you invest in these types of stocks.
So, now you know the questions that should be asked about the benefits of investing in Canadian stocks. How much money can you expect to make with dividends? Will your investment work if the market fluctuates? How much will you pay per share and how much will you pay per year? As you consider all of these questions, you may find that Canadian dividends are right for you. If you decide to invest in Canadian stocks, you may even see yourself making a large sum of money.
The bottom line is that there are many things to think about when it comes to dividend growth. There is no one right way to invest in the stock market. There are some Canadian dividends investment strategies that are proven to work and some that aren’t. It is up to you to choose which ones you would like to use in order to grow your money.
