Investors love dividend stocks, and many people see them as being among the lowest-risk investments in the stock market. Yet even with their reputation for safety, dividend stocks can be dangerous -- and smart investors prepare for those risks by recognizing the damage they can do to their portfolio if they're not careful. To help you better understand exactly what pitfalls to watch out for, we asked three Motley Fool contributors to talk about what they see as the biggest risks of dividend stocks. Read on to see what they have to say and whether your portfolio might need some adjustments.
Dan Dzombak - One rarely recognized risk of dividend stocks is what happens when a payout is cut. Besides losing a steady payment, dividend investors flee from stocks that reduce or eliminate their payout. In the rush to get out, investors will likely sell for a low price. Jordan Wathen - when a business pays out all of its income as a dividend, any drop in income will ultimately result in a drop in the payout. Dan Caplinger -income-intensive investments are often sensitive to interest rates.
Source: Motley Fool
Related Articles:
- Stock Dividends - The Gift of Nothing
- What's More Powerful Than Compound Interest?
- Dividends vs. Stock Buybacks
- 5 Lessons Learned About Investing In Dividend Growth Stocks
- 6 High-Yielding Mega-Cap Stocks
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Today, we’ll look at three high-yield dividend stocks that have earned a ‘perfect 10’ from the Smart Score. For investors seeking a clear fo...
-
Many companies have been suspending their dividends during the COVID-19 crisis, and in many cases it is understandable. In times of economic...
-
While near-term fluctuations in the stock market can be unpredictable, dividends are one of the few reliable sources of market returns. Stoc...
-
“Research shows that dividend cuts are associated with significant share price declines on announcement,” Cornell University Professor of Fi...
-
AbbVie (NASDAQ:ABBV) is in the midst of a transition. AbbVie began life about a decade ago when it was spun off from health care and medical...
-
With interest rates at historic lows and bond-yields heading down quickly, the payouts from dividend stocks are becoming more and more appea...
-
3M Company (NYSE:MMM) is growing its FCF very well, and as a result, MMM stock is likely to move up at least 44% over the next or so. Right ...
-
Dividend investing is a great way for investors to earn reliable income. Dividend stocks tend to have stable, cash-generating business model...
-
Warren Buffett has said the best time to sell is never, and though he often doesn't follow his own rules -- as the recent sale of all th...
-
We’ve pulled up the details on some of Oppenheimer's recommendations. These are stocks with a specific set of clear attributes, that fre...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.