12-21-2021, 10:50 AM
I think we all agree on the fact that there is too much emphasis purely on the dividend. It is good to have a dividend but it cannot be the full story. I am actually one of those people here who has always had a relatively high yield, but that is simply because it fits my own situation better. Looking back, most of my bad investments have been those high yielders with not much growth, and luckily I have managed to exit most of those positions throughout the years.
I still think that high yielders have their place in a portfolio, but it depends entirely on the individual's situation. For you, seeing as it sounds like you don't plan on touching this money for the next 20 years, I do not think a massive yield is high priority. You can have one or two in there if you feel like it but do not base your whole portfolio on these.
The very first thing I would do in your shoes is to go and find the 5 and 10 year dividend growth rates for all of those companies. If you find that the annual rate, for either period, is less than 5% then I would say it's very safe to just throw that stock into the trash can.
I still think that high yielders have their place in a portfolio, but it depends entirely on the individual's situation. For you, seeing as it sounds like you don't plan on touching this money for the next 20 years, I do not think a massive yield is high priority. You can have one or two in there if you feel like it but do not base your whole portfolio on these.
The very first thing I would do in your shoes is to go and find the 5 and 10 year dividend growth rates for all of those companies. If you find that the annual rate, for either period, is less than 5% then I would say it's very safe to just throw that stock into the trash can.