cheers Theeroy. l am not sure that companies paying dividends are denying economic reality and taking a chance.
one of the contributing factors to 1929 was the collapse of banks. banks have to remain solvent and healthy to ensure the economy can withstand economic shocks. there they are subject to heavy regulatory oversight so they don't stuff things up. if APRA or the NZ PM doesn't want divs they are cut. it is in our interests that banks don't pay divs to ensure financial stability if the US goes into meltdown.
gone are the days of buying banks for income as the baby boomers were able to do 30 years ago. l think this crisis (unlike in the GFC) has shown that banks are no longer a dependable income source. l went on mission 5 years ago to reduce overall exposure to this sector and look for other income streams. now l am glad l did although l still hold. buying a bank is fine but the divs are up to regulatory authority not the banks. there are for me just too many cons to leap into banks.
ANZ Price at posting:
$18.80 Sentiment: Hold Disclosure: Held
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