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Buy-and-Hold Dividend Stocks

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Gwenstacy
Posts: 6
Joined: Mon Dec 19, 2016 12:22 am

Buy-and-Hold Dividend Stocks

Post by Gwenstacy »

Buy and hold stocks are definitely underrated. Some investors spend copious amounts of time tracking their investments and hoping their value increase.

Then there are dividend investors. Sure, they like watching the value of their stocks rise, but they also like getting free money every three months—money they can either cash or reinvest.

Dividend investing might not be as exciting as trying to find the latest tech stock that is about to soar, but that’s because dividend investing is a long-term sport for patient investors. Dividends are typically paid out by larger, well-established companies and have become increasingly popular in the current near-record-low interest rate environment.
Gwenstacy
Posts: 6
Joined: Mon Dec 19, 2016 12:22 am

Re: Buy-and-Hold Dividend Stocks

Post by Gwenstacy »

Not all dividend stocks are created equal. You don’t want to invest in a company that pays most of its profits in dividends. This is a sign that the company is not reinvesting enough to promote future growth. If the company hits lean times and its cash starts to dry up, one of the first things to go is the dividend.

There are exceptions to this rule. For example, a real estate investment trust (REIT) must return at least 90% of its profits to investors.
Source: Stocks to Buy and Hold Forever
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