I have to admit, this is one of the more interesting threads on the entire site.
Of course we now all know that AAPL will be paying a dividend beginning this year. And as an AAPL investor, I take it as a positive. What it means to some investors is that we will now be receiving an actual return on our investment, in the form of income, rather than just the paper profits that we have now. For those who are new to investing or who want to learn more about historical returns in the stock market, there's a fairly decent site called Simple Stock Investing
. That, along with some time on the very valuable S&P site might provide some with better overall knowledge of the equity markets and the whats and whys of it all.
One thing that seems to be missing from some of the arguments here is that stocks don't always go up. The market doesn't always go up. And particularly in those times, dividends soften the blow for stocks that you would prefer to hold longer term. And even in better times, dividends add to the total return of a stock. If you go to the site I linked, you'll see that dividends provided approximately 44% of the returns from the S&P 500 over the past 80 years. And THAT is why people have historically chosen to have at least a portion of their portfolios in dividend paying stock. Since Buffett's name came up, take note of the preferred shares he's bought in BofA, GE and several other companies. He doesn't always go for the dividend (income). Sometimes he goes for an appreciation strategy, by buying the entire or substantial portion of the company. It's just part of a total return strategy that he's employed for decades.
Whether it's a house in Palos Verdes or a stock, you only find out what an asset is really worth the day that you sell it and the money is in your account. If we learned nothing else from the housing bubble, hopefully most of us now know that paper profits can't be used to buy dog food or baby diapers.
It's not necessary that every stock you own pays dividends. But certainly, anyone who has a well balanced portfolio would have a mix of dividend paying stocks, in addition to other asset classes. What the dividend will mean for Apple is up for debate. Had their investments yielded higher returns, maybe I'd feel differently. But parking the cash and seeing it be eaten away by inflation doesn't help anyone. Regardless, according to Cook, Oppenheimer and the BoD, Apple is in no danger of running short of cash to effectively run the business. And if they ever get in that state, they'll suspend or discontinue the dividend. Remember, the dividend is declared each quarter. It's not a binding contract that's been signed with shareholders. But what this certainly means for Apple investors is a return on investment that may make it less necessary to sell in order to realize some gains.
I like Apple products very much. Someone even called me a "fanboi" on another site. Uh, was that a compliment? But when it comes to stocks, the emotion goes out the window. I could still love their products. But I don't get married to any stock or company. If & when it comes time to sell AAPL, I'll pull the trigger on it just as I would any other stock I own. To me, the financial markets are exciting, if not fun (because, yes, I'm weird like that). But the second you get emotionally attached to any stock, just accept that your losing days are somewhere right around the corner.