Three Avoidable Mistakes Dividend Investors Make

Dividend investing can be easy. Buying and holding stocks that pay rising dividends year after year is not particularly complicated. Like any endeavor, practice makes perfect. The three avoidable mistakes in this article will help dividend investors to make fewer errors in their investing process.

Chasing high-yield stocks - High-yield stocks are appealing – 4%, 5%, or 6% yields look so much better than 2% or 3% yields. Often (but not always), high-yield stocks offer little in the way of growth potential. The dividend yield on high-yield stocks is often the only return investors will see. Being tricked by dividend growth - Another common error for dividend investors is to be tricked by unsustainable dividend growth. Investing in overvalued stocks - Investing in overvalued stocks is the biggest mistake dividend investors can make. The more overvalued the stock, the severity of the error in investing.

Source: Guru Focus

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