There are many known indicies in the financial world. Everyone knows about the Dow, the S&P 500, and the Nasdaq Composite. And there are many others.

But are there any indicies that track dividend activity?

Here is my suggested dividend activity index:

The aggregate value of increased and reduced dividends, based on market capitalization.

Example: If company A, which has 1,000,000 shares outstanding, decreases its dividend by two cents per share, This would cause a decrease of $20,000 (1,000,000 X $0.02) in the index.

Similarly, if company B, which has 1,000,000 shares outstanding, increases its dividend by two cents per share, This would cause an increase of $20,000 (1,000,000 X $0.02) in the index.

If company A and company B were in the same industry, there would be no net change for the dividend index for that industry,

I would propose separate indicies for stocks in the Dow, stocks in the S&P 500, and Nasdaq-listed stocks.

More specific indicators would be the indicies based on sector and also by industry.

These would indicate the overall financial strength and weakness of the companies in those indicies, and the overall direction of the economy.

An index based on dividend changes would be much more indicative of the health of a companies in a sector or industry compared to an index based on stock prices, because stock prices are more motivated by fear and greed, and dividends are based on real cash being returned to investors.

Should money returned to investors increase, we have definitive proof of an increase in confidence in those businesses. Should money returned to investors decrease, we have definitive proof of an lowering of confidence in those businesses.

And the moving averages of these indicies would be telling signs as to the health of those companies.

Why Things Happen

While news organizations report what happens one way or another, there is often no context of why events occur. When one even precipitates another event, we the public are often left in the dark regarding the causes and influences of events.

For example, look at the following two news accounts:

07/10/2024  “Donald Trump threatens to send Mark Zuckerberg to prison if he is elected”

07/12/2024 “Meta is lifting restrictions on Trump’s accounts”

While the second event mentioned Truth Social, there was no mention in any of the reports about lifting restrictions of the threatened jailing.

Without taking a stand on the personalities or politics involved, can we surmise that the lifting of Meta’s Trump restrictions was  because Trump threatened to jail Zuckerberg? We cannot be sure, because no one explicitly said so, and they could all deny whatever they want, but it looks suspiciously so to me.

How about the following item:

07/19/2020  “Zuckerberg praises Trump’s response to assassination attempt”

Would it seem cynical to call this headline an attempt to kiss up to Trump, especially after being threatened with jail? So it would seem.

Your take on a Dividend Index, or recent events? Let me know here.

The illustrations are the self-portrait of Anna Maria van Schurman, and the 1659 English title page of her book “Dissertatio de ingenii muliebris” (“The learned maid; or, Whether a maid may be a scholar? : A logick exercise written in Latine by that incomparable virgin Anna Maria à Schurman of Utrecht. With some epistles to the famous Gassendus and others”).  Courtesy Folger Shakespeare Library, Washington, DC.

The post Dividend Index Needed; Why Things Happen appeared first in Smile If You Dare.