Like a spark to a flame

Growth investors, including those making plans for their retirement, can misunderstand, or at least underestimate, the importance of dividends in their investments. Dismissed as merely the icing on the cake, dividends are often overlooked in the pursuit of capital growth. But there are reasons why growth investors should pay close attention to dividends and are at risk of sacrificing total return by ignoring them. Here are a few of those reasons. First, is the powerful effect of long-term compounding of reinvested dividends. Reinvesting the dividends from investments can make all the ...