There are many common misconceptions about dividend investing. For example, all dividend paying stocks are stable companies. Or, a dividend from a stock will more than offset any losses you receive in share price over the long term. However, there is one that I find most persistent in both new and experienced dividend investors. It is often viewed as a reason to buy a stock, yet it should never be the only reason. I know I have been guilty of basing a buy decision on this misconception in the past.
That misconception is that a dividend stock that increases its dividend is a good buy. Please do not get me wrong, as a dividend growth investor one of my most important criteria when completing stock analysis is a long track record of increasing dividends. However it is not the be all and end all that it can seem like when you read a blog like mine. There are numerous other factors that must go into your decision to buy a stock.
Source: The Dividend Guy
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