recommentation for dividend stocks

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fiverus
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Joined: Wed Jan 04, 2017 11:56 am

recommentation for dividend stocks

Post by fiverus » Mon Mar 06, 2017 11:24 am

Any recommendations for low paying stock with high dividends? I'm in my late 50's and I've been learning and reading about dividends. Is this a better alternative than having your ER money in a money market account? It seems like it can be more beneficial then a money market. What is your opinion? or idea ?

Thanks,

aristotelian
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Joined: Wed Jan 11, 2017 8:05 pm

Re: recommentation for dividend stocks

Post by aristotelian » Mon Mar 06, 2017 11:34 am

Your best bet is a diversified low cost index fund tracking the whole stock market (such as Vanguard Total Stock Market Index). That way you never need to get into the business of picking individual stocks. You should probably read the Wiki and some of the books and resources on it before getting started in investing.

https://www.bogleheads.org/wiki/Main_Page

Over the long term you are likely to make 6-10% annually by investing in the stock market, although there may be times when you lose as much as 50% of your entire portfolio. Just be aware of that risk before you get started. At age 50, be very very careful about how much you want to risk.

If you want more specific information you will need to post more details on your goals and current portfolio, per the posting instructions at the top of the forum.

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nedsaid
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Re: recommentation for dividend stocks

Post by nedsaid » Mon Mar 06, 2017 11:57 am

fiverus wrote:Any recommendations for low paying stock with high dividends? I'm in my late 50's and I've been learning and reading about dividends. Is this a better alternative than having your ER money in a money market account? It seems like it can be more beneficial then a money market. What is your opinion? or idea ?

Thanks,
Money market funds are intended for your money that needs to be kept safe. Your emergency funds and funds needed for short term goals should be kept here.

Dividend stocks might have high payouts but they still are stocks and you will experience the volatility of the stock market. Stocks are longer term investments and you invest in them primarily for capital appreciation and not for income.

Dividend investing has been very popular since interest rates fell dramatically in the wake of the 2008-2009 financial crisis. Very low interest rates have been around since then and are not a secret. I think you would regret piling into high dividend stocks at this time as they have been a popular investment and you might be locking in subpar returns for the future.

I think you have to ask yourself the question, what do I want from my money? It sounds like you don't really know. It also sounds like you need to learn more about how investing and markets work, otherwise you will be confused by our advice.
A fool and his money are good for business.

Vanguard Fan 1367
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Re: recommentation for dividend stocks

Post by Vanguard Fan 1367 » Mon Mar 06, 2017 12:25 pm

I have had good success with Vanguard's High Dividend Index ETF VYM. Its SEC Yield today is listed at 3%. I got interested in the fund because I heard the great Jack Bogle mention that it might be something to consider the Mutual Fund.

I have also had success with Johnson and Johnson and other high dividend yield stocks but after becoming a Boglehead am more into the index than individual stocks.

fiverus
Posts: 96
Joined: Wed Jan 04, 2017 11:56 am

Re: recommentation for dividend stocks

Post by fiverus » Mon Mar 06, 2017 12:38 pm

Thank you everyone. And yes, I do need to learn more about investing and how the market works.

mhalley
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Joined: Tue Nov 20, 2007 6:02 am

Re: recommentation for dividend stocks

Post by mhalley » Mon Mar 06, 2017 1:14 pm

Bogleheads do not recommend dividend investing, rather prefer total return investing. Also we do not recommend individual stocks. Check out vanguards white paper.

https://personal.vanguard.com/pdf/s352.pdf

"The current low-yield environment is leading many investors to focus on only one piece of their portfolio’s total return, namely, the income return. This focus may be encouraging investors to consider strategies such as extending the duration of their bond portfolios, tilting their bond holdings toward high-yield bonds, or shifting their equity holdings toward higher-dividend-paying stocks. Investors may adopt one or more of these strategies in the belief that they will be rewarded with a more certain return and, therefore, less risk. What these investors may fail to realize is that moving away from a broadly diversified portfolio and concentrating on certain sectors can potentially result in a less diversified portfolio, increased risk, decreased tax-efficiency
(for taxable investors), and/or an increased chance of falling short of long-term financial goals. On the other hand, as discussed in this paper, a total-return approach potentially offers a number of portfolio benefits, including maintaining diversification, enhancing the portfolio’s tax-efficiency, and increasing the portfolio’s longevity."

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