Dividends4Life: 3 Dividend Investing Tips That Could Earn You Thousands

Money market funds and CDs aren't cutting it with income investors these days. With interest rates so low it's only natural for risk-averse investors to find themselves in the stock market for all the wrong reasons. Let's go over a few pointers to help yield chasers make the most of Wall Street.

1. High yields are usually too good to be true - If you run a stock screen and sort for the highest payouts you're literally asking for trouble. The beefiest yields are typically bountiful for a reason. In this climate where low interest rates are the norm you're not going to find a sustainable high yield without a catch. 2. Don't sleep on capital gains - If chasing yields can be dangerous it also follows that dismissing low-yielding stocks can be a missed connection. Let's try NVIDIA (NASDAQ:NVDA) on for size. NVIDIA's yield was less than 0.3% at the start of 2020, and it's now even more yawn-worthy at a little more than 0.1%. However, the yield has been cut by more than half because the stock has more than doubled this year. Income is nice, but capital gains are better. 3. Find the right balance of reasonable yields and growth - Set your sights lower on the payout front, and you may find a company with strong prospects to keep boosting its distributions as its bottom line improves.

Source: Motley Fool

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