Dividends - how does it affect your life and why is it so important to you?
Dividends are important to you as an investor because at some point, especially when you retire, you will need to live on passive income that is not dependent on your efforts or your work.
In this article, I will use my Guru Focus monitor to find the companies that pay the most dividends in Brazil and see if this criterion is a good choice for company selection.
To do this, we will backtest a little bit back in time and select a company based on dividend yield to see what the results will be.
To better understand this analysis, it would be interesting for you to follow me on the YouTube video, where you will have more details.
My selection criteria indicated that Petrobras was one of the companies that paid the most dividends in 2021. Therefore, when we simulate a purchase of this share in December 2021, we see that we would have paid around R$30 and now, on 03/23/2023, the quotation is R$26. If we only take into account the share price in the period, we would conclude that the share suffered a devaluation and our operation suffered financial losses . However, when we take into account the effect of dividends , we realize that we would have received R$16.77 in earnings in the period. Therefore, despite the drop in the share price , we would still have obtained a capital gain of R$12.7 in just over 15 months, an approximate return of 29% per year.
Thiago Nigro is trying to make you understand that dividends are also important when making investment decisions and that they are often overlooked by some investors . Therefore, dividends are not only important for millionaire people, but also for ordinary investors.
However, I want to warn you that you cannot win in this market alone. You'll need expert help and a lot of knowledge, as well as a good dose of willpower.