For many, dividend investing is all about the yield. They search for stocks that offer high yields, thinking that’s enough to pull them through the treadmill of life before slowing down in retirement. But after trading stocks for over 20 years, I’ve seen my fair share of supposedly invincible high-yield dividend stocks whose dividend, stock price, or both go to zero in the face of a recession, financial crisis, or something in between. So, believe me when I say that yields aren’t everything.
Bernard McGinn and McCoy Penninger of McGinn Penninger Investment Management, Inc. agree. According to them, “Investing in dividend stocks can be a powerful strategy for long-term wealth creation, but it’s essential to focus on quality rather than simply chasing high yields.”
