I have always defined myself as a dividend seeking investor, with a little spice. The "spice" that has been referred to are mainly those higher yielding stocks that add punch to a portfolio's overall yield. While I absolutely support this approach, along with a solid core portfolio of dividend winner stocks, a prudent investor should never hold on to those high flying dividend "opportunity" stocks for too long. Especially when an investor is retired or ready to retire.
Throughout the last few years of puny interest rates on fixed income investments, investors have flocked to many of the ultra high dividend stocks for income. Holding them too long can absolutely wreck your overall portfolio. Our portfolio also has held 3 particularly well known high-yield dividend opportunity stocks that we were fortunate enough to move in and out of before any serious damage was done to our portfolio. The stocks were American Capital (AGNC), Annaly Capital (NLY) and Linn Co (LNCO), and we no longer own them and do not have to worry what might be around the corner to hurt the value of these stocks.
Source: Seeking Alpha
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