A recent tweet on my timeline highlighted this conversation between an investor and a mutual fund representative
Investor: The XYZ scheme has declared a dividend. But I did not receive any dividends?
Rep: Let me check. …Sir, this is because you are invested in the growth option.
Investor: Oh, so how do I get the dividends?
Rep: (Head spins)
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My father holds shares of a large FMCG MNC. One day, I saw him smiling ear to ear.
“What is it?” I was curious.
He held the cheque in front of his face, details facing towards me. It was for a dividend declared by the company.
I didn’t want to spoil his happiness but I mentioned to him, “this dividend is nothing compared to the value of your investment. Your stock value has tripled in the last 6 years.” He simply ignored the statement.
I continued to reason, “your dividend yield is a mere 0.33%.” (Dividend yield is dividend amount / Market value of investment)
But the gyaan fell on deaf ears. He was happy in the moment with his dividend.
What is this fascination with dividends?
