Dividend Paying Shares vs. Liquid Instruments. Read the Investors Choice.
There’s always been a lot of talk about dividends and liquid instruments and how they should be in every investor´s portfolio. There has been a lot of talk in recent years that discusses which one is better to have. Should an investor have more dividend-paying shares in a company, or should they have more liquid assets which could potentially be more advantageous in both the short- and long-term?
Clearly, there’s a lot that can be said about both of them, and a lot of investors will argue back and forth. Why don’t we stop for a moment and take a quick look at the advantages and disadvantages of both sides of the issue and see what makes dividends and liquid assets so popular.
For dividend paying shares, the advantages are quite obvious: they pay dividends and holding onto them could potentially mean a higher return down the line and the investor could end up reaping a bigger reward over time. Sure, the liquid asset gives you the ability to liquidate or sell and have money in hand right now, in the immediate future, but the dividend-paying share will probably net you a greater return over time and its value could (more than likely) increase, which will net you even more.
The advantage of the liquid instrument is obvious as well: there´s no waiting or down time if you need to liquidate. You can easily convert it to cash, and just walk away. That’s it. Need a quick sum of cash to get into another investment opportunity? Liquidate some of your assets and move on to the next investment.
Yet there are disadvantages to both of those at the same time, just like anything else. With dividends, typically finding a dividend-paying stock that performs well is very hard. You could find a limited number of publicly trading Real Estate Investment Trusts (REITs) that are performing well, but God forbid another recession like the one in 2009 and you are holding a REIT that most likely will start to lose its value, potentially putting your initial investment in jeopardy, not to mention that in such a situation you could wave goodbye to your dividends. And if you still wanted to stick to the dividend-paying share strategy, you would most likely get a higher ROI if getting involved with a private company, but the issue there is that you´re invested in a private company that most likely will not be able to liquidate your position in a simple manner.
Whereas the disadvantage of the liquid instruments has to do with volatility, their value fluctuates depending on the market conditions and could potentially end up becoming a loss. Not only that, but if you own shares that are not performing very well they’re much harder to liquidate, and often when converted to cash there´s a fee involved.
So clearly, there are advantages and disadvantages to both of them. So, which do you go with as your investment choice? What if I told you that there’s a middle road that uses the advantages of both, but has none of the disadvantages? Having a new asset class that pays dividends, but can quickly be liquidated and converted to cash quickly?
Sounds like a dream come true, right? Well there’s a new startup on the horizon called Konzortia Capital that’s actually doing just that. It’s fairly new, but they’ve got a dedicated team that’s working around the clock to provide this New Asset Class (NAC), and it’s got a lot of investors talking.
This NAC is so liquid that it challenges the very definition of money.
It is Liquid, it is tradeable, and it pays dividends. Can you guess what it is? You can hold or sell – or even use it to make payments globally… Watch this 30-second video clip and click here to learn more.