Dividends (NOT)

JPMorgan Chase announced today that it is cutting its quarterly dividend from $.38 per share to $.05 per share. This represents an 87% reduction in the amount of its dividend.

My first blog posting was titled “The World is Falling Apart –Part I”. Make no mistake, JPMorgan will not be the last firm to make a move of this nature. Although it will “save $5 Billion” by decreasing its dividend, what about the stockholders who relied on the dividend for income?

Check your portfolios – and do it now. Many REITS will cut dividends (possibly paying in shares as though you can spend that money), as will other companies who have had long term histories of paying dividends, in an effort to “save cash”.

It seems as though all forms of historical fundamental stock analysis is out the window. Retirees who actually spent less than they earned, saved, and invested in a conservative portfolios are going to see their incomes cut as companies reduce dividends. Less income means less purchasing. Who and what will stimulate the economy?

As more people continue to lose jobs, there will be an inevitable rise in crime – even in the good neighborhoods.

Every day gets more interesting. Every new problem is creating a waterfall of problems; and, all solutions posed by the government seem to be creating new problems too.

I wish I could tell you the magic answer to all of the problems. Right now, I’m watching from the sidelines, helping companies that have sought my guidance, and trying to maximize opportunities. I welcome your thoughts – feel free to comment.

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