Picture of Brad Tinnon

Brad Tinnon

Is Dividend Investing a Good Idea?

Occasionally I’ll get asked whether investing in dividend paying stocks is a good idea. My general response is that the evidence doesn’t support this as a strategy. In other words, there is no empirical evidence that shows dividend investing provides superior returns than the market.

One of the primary reasons that investors fall in love with a dividend investment strategy is because dividends provide a steady stream of income. The income can and will fluctuate, but none-the-less you are provided a stream of income.

However, it’s a fallacy that dividends are income – they are NOT! They are just a return of capital (i.e. your own contributions) as Larry Swedroe outlines in his recent Morningstar article. This is an article worth reading.

Larry also points out that a better investing strategy is one that targets various factors such as stock size, value, and profitability which is what B.E.S.T. Wealth has been doing for quite some time.

Curious to read more? I’ve actually written about this topic in the past. Click here to read.

If you’d like to receive financial tips on a periodic basis, then click here to sign up. You can always unsubscribe at any time.

Brad Tinnon
CERTIFIED FINANCIAL PLANNER™

Photo by Stephen Dawson on Unsplash

Facebook
LinkedIn
Twitter
Email
Print

Leave a Comment

Your email address will not be published. Required fields are marked *

OUR PLEDGE

  • No Sales Tactics
  • No Commissions
  • No Investment Limitations
  • No Sales Quotas
  • No Investment Minimums
  • No Minimum Fees
  • True Financial Planning
  • Satisfaction Guarantee

Stay Connected

Get Weekly Financial Tips

Scroll to Top

Thank you so much for signing up to receive periodic Finance Tips! We hope you enjoy the content.

* Downloading PDF will also sign you up to receive weekly financial tips. But don’t worry, you can always unsubscribe anytime.

Please check your email for the download instructions. We hope you enjoy the content!