A dividend is a portion of a company’s profit paid to preferred and common shareholders. A stock selling for $20 a share with an annual dividend of $1 a share yields the investor 5%.
Term of the Minute
Investments that have no guarantee of safety of capital but are a potential for generation of capital gains which can account for 10% to 80% of a balanced portfolio. Examples include common shares, derivatives, convertible bonds, preferred shares and equity mutual funds.