It is the dividend season, between February and May the German stock corporations distribute part of their profits to their shareholders. In the past year it was over 36 billion euros, the dividend yield of individual stocks is often several percent – far more than can be achieved with government bonds or even in the savings book in times of low interest rates. But what are the risks associated with this type of investment? And how do you choose the right stocks? The investor Christian W. Röhl, author of the bestseller “Stay cool and collect dividends” and founder of the financial platform DividendenAdel.de provides answers to these questions.
MIRROR: Are dividends the new interest rate?
Röhl: Many say so, but it’s just as wrong as orange is the new black. Interest and dividends are two very different things. The interest is the – except in the event of bankruptcy – the secure return of a bond. I also get my money back at a pre-defined time. Dividends are the profit from an entrepreneurial investment.
MIRROR: But dividends are one way to generate income from an investment …
Röhl: … which is particularly virulent for many investors because other income, namely interest, can no longer be generated. But that there is no interest rate shouldn’t be the motive for investors to buy shares. Because that provokes nasty surprises on the next course slide – and it comes as surely as the amen in the church.
MIRROR:Can you still get a reasonably secure return on your invested money with the help of dividends?