Investors love dividend stocks—they pay you regularly just for holding them, they’re less volatile than other stocks, and over time, they actually deliver higher returns too. Investing in dividend stocks isn’t hard, but it is a little different from growth or value investing, or other strategies based purely on capital appreciation. Following rules designed to maximize capital appreciation can actually hurt your overall returns when buying and selling dividend stocks.
So what’s different about dividend investing? To make it easy, here’s my list of the top 10 things dividend investors must remember—I call them the 10 Commandments of Dividend Investing.
1. Dividends are King
2. Thou Shalt Do Your Research
3. Follow the Money
4. Take a Long-Term View
5. Thou Shalt Be Patient
6. Know Thyself
7. Thou Shalt Start Early
8. Thou Shalt Diversify
9. Thou Shalt Not Covet
10. Know When to Admit Defeat
Source: Cabot Investing
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