Dividend Suspensions and Reductions – A Natural Characteristics of Economic Cycle.

In one of my earlier posts, I had discussed how smaller ones gets ignored, or gets buried under the media onslaughts, or perhaps they do not have the oomph! Dividend cuts by financial institutions (BAC, C, WFC, etc.) and corporations that supposedly represent American economy (GE, GM, PFE, etc) have been in headlines. In fact business media have been so focused on them that speculations with various scenarios start well before the announcement of dividend suspensions or reductions. In addition, business media has also given a wide coverage to Standard and Poor’s projection that cumulative dividends from corporations in S&P500 index will reduce by 13.3% for year 2009. In this environment it is likely for individual investors to get distracted and flustered by the dividend cuts. However, before we do that, let us look at current dividend situation in historical perspective. continue reading rest of the article….

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