A dividend is the amount of profit that a company returns to its shareholders.

It serves as a reward for shareholders and helps attract new investment.

Dividends are usually paid in cash, but can sometimes be offered as additional shares of stock.

They are typically paid quarterly, though some companies may pay annually or on other schedules.

The dividend yield is a financial ratio that shows how much a company pays out in dividends relative to its stock price.

It’s calculated by dividing the total annual dividends by the share price and converting to a percentage.

Not all companies pay dividends. Some, especially smaller or growth-focused companies, may reinvest profits instead.

Dividend-paying stocks can be attractive for income-seeking investors, particularly retirees.

Higher dividend yields may indicate higher risk, as struggling companies might raise dividends to attract investors.

The BOJ is now likely to be the only major central bank hiking rates this year, at the same time as the US Federal Reserve is heading the other way, which is unusual and marks Japan as an “outlier”.

For beginner investors, this shows that not all countries are in the same place in the economic cycle. Central banks can be tightening in one country and easing in another, creating opportunities and risks in different markets.

Interest rate decisions, like the BOJ’s move to 0.75%, can change the direction of bond yields, currencies and stock markets, even if the level of rates still looks low.

As a beginner investor, building a simple habit of checking major central bank decisions (US, Europe, Japan, UK) can help you understand big market moves rather than being surprised by them.

Dividends plus buybacks create a “cash yield” of around 5.5%, which currently beats inflation, interest on cash at the Bank of England base rate, and 10‑year UK government bonds, meaning UK shares are paying out a relatively attractive stream of cash to investors.

For a beginner investor using income funds or dividend-focused ETFs, this highlights how a big chunk of long‑term returns can come from income, not just from rising share prices.

Understand that the total return = price change + dividends, which means that a meaningful part of your return could likely come from dividends and buybacks over time.

When assessing a UK equity fund or ETF, look at the “dividend yield” (how much income it pays).

If the jobs data show a weaker US economy, markets may expect more interest‑rate cuts in the future, which usually makes the dollar weaker and can support stock and bond prices.

If the data is strong, markets may expect rates to stay higher for longer, which can support the dollar but put pressure on some stocks and “rate‑sensitive” assets (like growth shares or property‑linked investments).

Focus on the “why”, not just the “what”. Instead of just seeing "Dollar is down," ask "Why is it down?" In this case, it's down because of expectations about the future. Markets move on what they think will happen next, not just what is happening right now.

Use macro articles as education: learn what terms like “jobs data”, “interest‑rate expectations”, “central bank meeting” and “risk‑off” roughly mean, but do not treat them as trading signals.