Making Money Minute with Ron Hiebert - Share Buybacks & Stock Prices

For well over a century, most of the gains from owning stocks came from the dividends they paid - up to 90% in fact. Then things began to change. In our present era, only 30% of gains come from dividends. The remainder, or 70%, now comes from share price appreciation. One of the reasons for this, is, companies are using more of their profits to buy back shares instead of using them to pay out dividends. Last year, companies globally spent 1.3 trillion dollars on share buybacks. This pushed their share count down, and their share price up. It is one of the reasons, for the incredibly high prices, stocks are currently enjoying.

For more information listen to our Making Money podcast with Ron Hiebert and Graham Hicks at letsmakemoney.ca or CFCW.com.