Dividend Investing In All Markets (DIV)

I read an article titled “Rising Markets are Bad for Dividends”. The premise of the article was that rising stock prices tend to bring yields down. As a result the best time to invest in dividend stocks is during market meltdowns. As a long term dividend investor, I disagree with several points of the article.

While rising prices typically result in decreasing current yields, the dividend payments remain unchanged in most circumstances. Even better, if you select some quality dividend stocks such as McDonald’s (MCD) or Coca-Cola (KO) your dividend payment is likely to increase over time. As a result investors who purchased at the lower prices have essentially managed to lock in the higher yield. This means that their yield on cost would be higher than current yields and would most likely increase if the company raises distributions.

Source: Dividend Growth Investor

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