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How to invest in dividend stocks

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  • (How to) How to invest in dividend stocks

    The stock market is one of the best ways to build wealth, but not all stocks are created equal. Whether your long-term investment horizon is five years, 25 years, or 45 years or more, your best option for creating long-term wealth is with a diversified portfolio of high-quality stocks that pay a dividend.

    I am looking to gather wealth by investing in dividend.

    Need inputs on what to keep in mind while investing

  • #2
    Found a very good piece on how to invest in dividend stocks.
    Companies with a long history of paying a dividend and increasing it annually tend to be larger, well-run companies with an international footprint, consistent growth strategies, and a strong competitive advantage.

    Why invest in a big company with a five-percent dividend yield when you can invest in a penny stock with a 15% dividend yield? There is a risk/reward trade-off when it comes to dividend-yielding stocks; the higher the yield, the greater the risk. Is it worth risking all of your capital on an unproven startup for a 15% yield?

    High-dividend yields may be attractive when you’re looking at near-zero interest rates and central banks addicted to negative interest rates, but it’s important to understand what you’re investing in and what the risks are.

    A stable business that increases its annual five-percent dividend on a consistent basis is more attractive than a business with an eye-watering 15% annual dividend that doesn’t. In fact, companies that grow their dividends are more attractive than those that simply pay a high dividend.

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