Dividend investing is a strategy where investors look to purchase stocks that pay dividends on a regular basis, such as quarterly or annually, with the goal of receiving a steady stream of income. Here are a few strategies that you can consider when dividend investing:
- Diversification: Spread your investment across multiple companies and industries to reduce risk.
- Consistency: Look for companies that have a history of consistent dividend payments, as they are more likely to continue paying dividends in the future.
- Growth: Look for companies that have a history of growing their dividends over time, as this can indicate that the company is financially stable and has a positive outlook.
- Yield: Look for companies that offer a high dividend yield, which is the annual dividend payment divided by the current stock price. Keep in mind high yield stocks could be a indication of a high risk stock. Personally, I avoid mortgage REITs because even though they have high yields, the risk is great and often they drop and are very sensitive to interest rates.
- Quality and Stability: Look for high-quality, financially stable companies with strong fundamentals, like a healthy balance sheet and a low debt-to-equity ratio.
- Research: Research on company's earning power, growth potential and quality of management.
- Re-evaluating: Continuously re-evaluate your portfolio, taking into account changes in the business environment and the companies' financial situations.
- Combine with Growth Stock: Combine dividend stock with high growth potential which balance out the portfolio
It's also important to remember that dividends are not guaranteed, and a company can always change their dividend policy at any time, It's important to do your own research and due diligence before making any investment decisions. This is not investment advice.
