Let's say I have $100k in a fund like VWEHX, that yields 5.35%. Then I have a supplementary income of $5,350. If the market crashes and my $100k goes to $50k, I still have a supplementary income of $2,675. A guy who owns stocks that don't pay dividends gets NOTHING and has to sit around for 10 years waiting just so he can break even. Not to mention RISK.
Well, generally people who are young are investing for the long-term. Which means that they want growth in the stock price.
Generally companies that are growing very rapidly are young and are putting most of their profits (if they have any) back in to growing the business. Which leaves little or nothing to pay out to shareholders in dividends.
Companies that are paying out a good bit in dividends are usually established businesses with steady and reliable incomes. Along with that is usually lower growth prospects.
Of course that is a massive generalization, and there are many good, growing companies which pay dividends and many young rapidly growing companies that are going to be bankrupt before they ever pay a dividend. But that is the general theory.
Your post indicates a massive misunderstanding of how a dividend yield is calculated. It is often reported as a percentage, but companies give out $X per share. If the price halves, the yield doubles, not halves. Of courseusually when a price craters like that it is for underlying weakness in the business which is likely to lead them to cut their dividend.
Sometimes the companies will stop paying dividends. You're right in that people invested in dividend paying stocks can ride out down times in the market when the stock price may slump for years, but in some cases depending on the company, the dividends may be suspended.
I’m a D2 female runner. Our coach explicitly told us not to visit LetsRun forums.
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