Page 29 - Waterfall City Issue 8 August 2024

CORPORATE ACTIONS

How they impact your portfolio

By Wendy Myers, Head of Securities, PSG Wealth

I nvesting involves not only company’s financial health and its

prospects in the near term. They can be
choosing the right stocks to
ensure that you achieve your
either voluntary in nature when investors
long-term investment goals
when participation is obligatory.
but also understanding portfolio choose to participate or mandatory
performance evaluation and
the impact of corporate actions Corporate actions include dividend
on portfolio performance. distributions, stock splits, spinoffs,
mergers and acquisitions.
When a publicly traded company
announces a corporate action, the Dividend distributions can result
savvy investor knows it’s an event in a cash injection into an investor’s
likely to impact the stock price. If portfolio, offering options to reinvest
you’re a shareholder or considering into the market or enhancing your cash
buying company shares, you must reserves until you are ready to deploy it.
understand how a corporate action Companies can also provide a dividend
will affect the company’s share price. distribution in stock instead of cash. This
will naturally increase your exposure
Corporate actions can indicate a Wendy Myers, Head of Securities, PSG Wealth to market fluctuations, impacting your

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