SEPTEMBER WAS THE WORST MONTH FOR DIVIDENDS, BUT JANUARY MAY BRING INSULT TO INJURY

Blue-chip dividend investors aren’t happy campers these days. Their favorite financial stocks have declined significantly, and cut or omitted their dividends. The insult to injury however may come next January, when they find out that since their company didn’t make any money, they didn’t pay any U.S. Federal income taxes, and therefore, the dividends that they were paid are not dividend qualified, meaning they have to pay 35% tax on them instead of 15%. On the bright side, since dividend investors usually hold on to their stocks for decades, many of them will still show a gain over the decades, that is if the company is still around.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.