Et must have seemed like a godsend to the German financial industry: a few years ago, Germany’s investors, known to be extremely cautious, suddenly began to show more interest in stocks. However, for a very specific type of stock called dividend stocks. Price fluctuations do occur here, but are ideally less pronounced than with other securities. And regular distributions to shareholders, called dividends, are the real highlight. What inspired the industry to create the slogan “The dividend is the new interest” in times of zero interest.
Editor in the “Money & More” section of the Frankfurter Allgemeine Sonntagszeitung.
Of course, equating dividends with interest has always been nonsense. Because unlike the interest on a bond, a company is not obliged to distribute money to its shareholders. In times of rising share prices – in principle almost all of the past decade – investors hardly had to worry about that. Because the distributions in the Dax rose with beautiful regularity almost every year. In 2019, the Dax companies paid their shareholders a total of more than 38 billion euros in dividends. A record.