Dividends4Life: 12 Things To Dislike About Dividend Growth Stocks

12 Things To Dislike About Dividend Growth Stocks

Posted by D4L | Thursday, February 07, 2013 | | 0 comments »

Everybody knows where I stand on dividend growth investing. I do not consider some of the following to be much in the way of drawbacks, or even necessarily to be true. That said, some of the following items are important disadvantages that need to be seriously considered. I will refrain from editorializing, and I won't present the ways that a dividend growth investor can ameliorate the valid risks presented. My goal here is to present the downsides of dividend investing as straightforwardly as possible.

1. Market risk
2. Dividend risk
3. You may not be able to make up for a dividend cut
4. Dividends are boring
5. Initial low yield (sometimes)
6. Dividends are taxed
7. Slower growing company
8. Behavioral changes
9. Non-compounding ((I))
10. The burden of reinvestment
11. Non-compounding ((II))
12. Stock prices drop by the amount of the dividend

Source: Seeking Alpha

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