I am a dividend-focused investor, managing money professionally at a time when “dividend stock investing” is growing in popularity. That’s why I think it’s important to point out the flaws in conventional wisdom regarding dividend stocks. This will certainly not be the last time I cover this subject, but for now here are a few headline items. They all relate to the same issue, which is that many investors take shortcuts to investing for dividend yield. Shortcuts work for a while…and then they blow up on you. Let’s see if we can spare you that calamity.
For many investors, dividend investing is a way to fund their lifestyle in retirement, or as a supplement to their working income. But I worry that my own profession, the investment advisory and management industry, is losing sight of that bottom-line goal. So many popular dividend ETFs don’t yield enough to support someone’s lifestyle unless they have an 8-figure net worth. For example, some of the largest dividend ETFs yield 2.50%-3.00%. If you plan to retire and live on $100,000 a year, you will need $3-4 Million in principal to produce that. If your goal is $150,000 a year in retirement income, you are talking $5-6 Million. This is a familiar problem to bond investors, who have seen income from Treasuries, Corporates and Munis fall to pathetically low levels.
Source: Forbes
Related Articles:
- 5 Higher Yielding, Lower Risk Stocks To Perk Up Your Dividend Income
- Are The Dividends Safe For These High-Yielding Stocks?
- Who Owns The Top Dividend Stocks?
- Wealth is a Journey, Dividend Stocks Can Take You There
- 3 Higher-Quality, High-Yield Dividend Stocks
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Billionaire Paul Singer has made a fortune shaking up tired businesses. And right now he has a new company in his crosshairs. In industry ci...
-
To live off the passive income from stocks, one of the important things to pay attention to is the company’s distribution policy. Nowadays, ...
-
Utility stocks feature plenty of steady cash flows and high dividends. It doesn’t matter so much what the economy is doing as people still n...
-
Whether you refresh your portfolio every five minutes or check it infrequently, like most investors you probably experience some level of st...
-
The problem is, finding high-quality dividend stocks isn't easy. That's because yield and risk tend to be correlated. In other words...
-
Usually, when a dividend yield is around 10%, it's due to concerns about its sustainability. However, that's not the case with this ...
-
Reinvesting your dividends is a great way to boost the long-term performance of your stock portfolio, but a history of regular payouts alone...
-
We're now three-fourths of the way through 2019, and it's certainly been an eventful year so far. Although the S&P 500 is up by ...
-
While cash flow can come from bond interest or interest from other types of investments, many income investors hone in on dividends. A divid...
-
If you review past articles on Income Investors, you might spot a common theme: the best-performing stocks are often those of quiet, unassum...
Whereas the dividends are low, the stock market is @ its historical highs. So, if you have invested 5 years ago ... you have had huge capital appreciation. It's not as if the dividends are low due to dividend cuts.
Interest rates are starting to go up again. So, i expect long term corporate bonds and treasuries to yield much (i.e. face value is going to drop).
My goal is to supplement dividends with long term capital gains. The essence of dividend investing or investing in general is not about how much we invest ... but about how long we are invested. I try to maximize both time & money.
Hopefully, I will end up with enough money to eek out a living.