Dividends are your friends? Dividend-paying stocks aren’t immune to declines.

Dividends are corporate earnings that companies pass on to their shareholders. They can be in the form of cash payments, shares of stock, or other property. Dividends may be issued over various timeframes and payout rates. There are a number of reasons why a corporation may choose to pass some of its earnings on as dividends, and several other reasons why it might prefer to reinvest all of its earnings back into the company. However, not all companies pay a dividend. Usually, the board of directors determines if a dividend is desirable for their particular company based on various financial and economic factors. Dividends are commonly paid in the form of cash distributions to the shareholders on a monthly, quarterly or yearly basis.