Dividends4Life: Stocks to Protect Your Dividend Portfolio

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Stocks to Protect Your Dividend Portfolio

Posted by D4L | Saturday, October 20, 2012 | | 0 comments »

Dividends can play an important role in boosting the returns of an individual’s portfolio, and can help to stabilize losses during a market downturn. While dividend paying stocks should be included in anyone’s portfolio they are not without their risks; One major factor exists that could force dividend paying stocks to see a decline in value. Individual investors need to protect themselves against this force otherwise they are likely to see significant losses in the near future.

It is important for investors not just to be diversified, but also to be hedged from various risks. Insurance companies as well as payroll service companies may help protect dividend as well as bond investors from a rise in interest rates. There are still other risks however that these investors need to worry about. Increases in dividend taxes, capital gains taxes, and broader changes in the economy could threaten an investor’s portfolio. Individuals should look for ways to hedge or diversify away from these risks as a strategy for preserving and accumulating wealth.

Source: Motley Fool

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