Here's a litmus test for stocks that I picked up from a Warren Buffett quote. Say you knew that the day after you bought shares of a company, the stock market would close for five years, so no matter what happens, you're stuck. Would you still invest?
While I think this test applies to all stocks, I find it especially useful when seeking out dividends. If you're relying on dividend reinvestment to boost your returns then you want to find companies that will keep paying for years to come -- preferably decades -- so compound interest will have time to work its magic.
Source: Motley Fool
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