7 Dividend Myths That Are Just Plain Wrong презентация

1. Higher dividends are always better While it’s certainly nice to get paid more on your investments, higher-yielding stocks aren’t automatically better than lower-yielding ones

For example, although AT&T pays a significantly higher dividend yield (5.5%) than every other stock mentioned in this slideshow, it tends to focus less on growth – meaning lower long-term potential Consider the performance of AT&T over the past 20 years relative to other popular dividend stocks and the overall market

2. You’ll do better with growth stocks It is a common myth that the best way to make money in stocks is to focus on up-and-coming growth companies In reality, many high-quality dividend stocks outperform the market over time For example, check out the average annual total return of these popular dividend stocks

As you can see, this can make a big difference in your returns over the long run. As you can see, this can make a big difference in your returns over the long run.

3. Dividend stocks don’t keep up with inflation Many investors don’t believe dividend increases will keep pace with inflation However, many of the most popular dividend stocks have a history of consistently beating inflation

4. All dividends are taxed favorably Unless your dividends meet the IRS’s definition of “qualified” dividends, they will be taxed as ordinary income. Qualified dividends are taxed at more favorable rates, just like long-term capital gains

5. Dividend stocks are only for older investors Many investors believe dividend stocks are “boring” and are only appropriate for older, income-seeking investors. However, dividend stocks can be a great way for young people to start building wealth.

As we’ve seen, many dividend stocks consistently produce total returns of 10% or more per year. Consider the value of a hypothetical $10,000 investment in these dividend stocks 30 years ago.

6. Buying right before the ex-dividend date is a smart strategy Many investors believe that they can purchase a dividend stock shortly before its ex-dividend date, then immediately sell the stock for the same price and then collect the dividend.

7. All dividend stocks are safe investments There are a lot of safe, profitable dividend stocks to choose from However, not all dividend stocks are safe

For example, many dividend stocks in the energy sector have recently been beaten down and forced to cut or even eliminate their dividend payments If a dividend looks too good to be true, it probably is. It’s important to do thorough research on all dividend stocks before buying.

You may also enjoy…The $60,000 Social Security bonus you can’t afford to overlookCLICK HERE TO READ NOW