Wednesday, March 28, 2012


In my latest investment research I recently discovered Aberdeen Chile Fund (CH), which I placed an order for in my taxable account.  CH has a dividend yield of 10.67% on their recent price of $18.48 per share.  While yield alone is not a good reason to buy, I also learned that in Chile companies are required to pay at least 30% of net profits to investors as dividends.  U.S. companies are allowed to cut or halt dividends at any time.  Although you wouldn't want throw all your investment dollars into high yielding foreign funds or stocks, it is a good idea to add a few to diversify your portfolio.

I've been reading a lot of annual reports during the most recent earnings season and am quite frankly appalled by the amount of each report dedicated to executive compensation.  O.K., they have to be paid and deserve to be paid well as long as they're increasing shareholder value.  However, I think it would be a good idea if they'd concentrate a little more on increasing payouts to shareholders, in the form of increased dividends.  Maybe if shareholders saw a little better payouts, they'd be less likely to vote against overly generous executive compensation plans.  I'm so disgusted by their greed and apparent lack of concern for shareholders interests, I make it a rule anymore to vote against any and all compensation plans.

It would be great if the U.S. would follow Chile's lead and require corporations, who rode out the latest financial crisis on piles of cash, to pay out 30% of net profits to shareholders.  I'm sure shareholders would put the money back into circulation and get the economy moving.  Their excuses for holding such large stockpiles of cash seem questionable now, especially in light of the latest round of compensation packages.  Were they really holding on to the money so they could give themselves pay raises, bonuses and fund lush retirements?  One has to wonder...

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