How to use dividends to help grow your investment portfolio | J.P. Morgan Wealth Management

Today, we're going to dive into a strategy that allows investors to generate income while also maintaining exposure to future economic growth, dividend investing. First, let's talk about what a dividend is. Imagine having an apple tree. You water it, nurture it, and over time it grows, and occasionally you'll get some delicious apples. In the world of investing, the apples are the dividends of your investment tree. As companies make profits, some choose to share a slice of that with their investors through dividends. Dividends are often paid by more established companies rather than those that are brand new and need to reinvest all of their earnings into growing the business. Companies that pay dividends typically do so quarterly, semi-annually, or annually. Importantly, the dividends are subject to the discretion of the company's board of directors, can vary, and are not guaranteed. Dividend investing is a popular strategy as it positions an investor to capitalize on a company's potential future growth by owning their stock and also receive income from dividends. A dividend investor is someone who focuses on owning assets that have historically paid regular dividends. Investors can elect to receive these dividends as cash or opt to have them reinvested. In the second scenario, the dividend proceeds are used to buy more shares of the company, which can be helpful for growing your investment over time. Think of the apple tree. As you get apples from your tree, you can use the apple seeds to plant more trees. As you reinvest dividends, you own more shares, which means you could receive more dividends, and the cycle continues. So, there you have it. Dividend investing is a strategy that aims to let your money work for you with the potential for growth over time. For more insights, check out chase. com/the note help you on your investing journey. See you later.