I recently watched a promotional video that outlined the reasons for owning dividend-paying stocks – tax-efficient income, lower volatility and you get paid to wait for markets to recover. I agreed with all the fund manager’s points, but he failed to mention that investors tend to get sloppy when it comes to income and dividends. The level of analysis and discipline that goes into buying tech or industrial stocks isn’t always evident when higher-yielding stocks (and structured products) are involved. Too many decisions are made for the wrong reasons. Here are a few of them.
Yield, Return of Capital, Diversification and Opportunity Cost. When it comes to income investing, yield and tax efficiency are important, but they have to take a back seat to diversification and valuation. Sometimes the best strategy is to accept a lower current yield and own a broader range of securities.
Source: Globe and Mail
Related Articles:
- 13 Dividend Stocks Headed In The Right Direction
- 12 Industrial Strength Dividend Stocks
- 10 Financial Services Dividend Stocks To Boost Your Yield
- Building Yield: 15 Consumer Goods Dividend Stocks
- 10 Higher Yield Dividend Stocks
When Dividend Investing Doesn't Pay Dividends
Posted by D4L | Saturday, November 19, 2011 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
If you've been holding back from investing in your future just because you don't have a lot of extra cash to spare, I've got gre...
-
If you are looking for high-yield dividend stocks that can beat the market, you might want to check out these three companies. They all have...
-
If you are here to build a portfolio that thrives in all seasons, consider dividend stocks. They can generate steady returns and provide sta...
-
The company's remarkable consistency and low-risk business model make it a "first-choice investment opportunity," according to...
-
One way to achieve financial freedom is to create passive income, or income that does not depend on your active involvement beyond a certain...
-
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contribut...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.