Dividends4Life: Avoid Making This Mistake With Your Dividend Stocks

Let's face it, we all make dumb decisions when it comes to finance and investing. These often happen because we are unable to control our fear, overconfidence, or impatience. And there is one particular error many people make when they move in an out of dividend stocks: They may be moving onto other pastures that aren't as green as the one they just left. Let's look at two important metrics that will help you avoid making this mistake: the cost-based yield and the yield hurdle.

Cost-based yield: so simple, yet so overlooked - Quick question: what yield are you receiving on any one dividend-paying stock in your portfolio? If you went immediately to your favorite finance ticker page and looked up the yield there, chances are that isn't the yield you personally are receiving on your investment. Chasing yield you had all along - When it comes to dividend stocks, many investors make the mistake of chasing yield. If you want to get more yield from your stock portfolio, be sure you know your cost-based yield and your yield hurdle, as they should play a large factor in your investment strategy.

Source: Motley Fool

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