Investing 102

[GregWeld]

A stock I used to own - Terra Nitrogen (TNH) - is THE PERFECT example of the relationship of DIVIDEND to PRICE action. I'd like you all to go to GOOGLE FINANCE -- open up a chart of TNH - stretch it out to the FIVE YEAR (so you can see the dollar amount of dividend paid)..... This should be an eye opener.

Note that as they INCREASED the div - the price went accordingly - but look what happens when they start to cut it!!

What's my point? Be very careful when "chasing yield"!! There's a reason that the yield percentage is so "tantalizingly high"... that comes with RISK! Risk is okay when it works out in your favor. Painful when it doesn't!! And you can only buy RISK assets when you're very actively managing them. They're not buy and holders / sleep well at night investments. Learn the difference.