Lux Investing

What range of dividend yields should I be looking at to invest?

Public Comments

1. Dividends aren't where the money is in the stock market. You hardly make any money from dividends... you make a ton more money off of the stock you buy and hold than the few bucks you get 4 times per year. Generally any dividend is a bonus. Anything over 2% is good. You aren't going to get much better than ATT with over 6%.
2. I disagree with your previous respondent. With rates so incredibly low on fixed income investments, dividend stocks appear to be very good to me. I have money in the following dividend stocks: ACAS HTE MIC MMP Do your own research.
3. I agree with Yarcofin. It depends on why your investing. If your in retirement then you want to invest in companies that pay a large dividend 4%+ (their called dividend stocks, or income stocks), because they provide a nice stream of income to live off of in retirement. But, if your young (10-50 yrs. old) you probably want to consider growth stocks. They are stocks that have opportunities to grow larger. These companies usually don't pay out large dividends because they want to keep their money to reinvest in the company. With growth stocks you are expecting the share price to increase, where as with dividends stocks you want the stocks price to be steady (upwards). You are much less likely to see large capital gains because of the rising price of the share with a dividend stock. Its not a bad idea to have a mix of both of these types of stocks in your portfolio, but most experts would recommend leaning towards growth stocks if your younger. Also consider the differences between growth stocks and value stocks, and large cap, and mid - small cap stocks. Don't worry, it sounds more complicated than it is, you'll catch on. Growth stocks generally have dividend yields ranging from 0% - 2.2% est.
4. It is certainly not a primary focus. Buying $25 preferred, which are bonds repackaged like preferred stocks better. BGM - GM yields 12%. The only risk is GM going out of business, Can get a safer 6%+ with JPM+X which is Jp Morgan. Many others.