Lux Investing

Age 25: Why should I not invest in dividend plays long term?

Public Comments

1. i can't think of a reason. a good dividend stock will grow tremendously if you reinvest the dividends. use a stop loss order to protect yourself against a crash.
2. It makes a good part of a well balanced portfolio. But don't look at dividends by itself. It still needs to be a good company. Here's one caveat.. If you're really rich, and you want to avoid paying more taxes, it's better to invest in companies that buy back stocks instead of dividends. This will allow you to avoid paying taxes until you sell, which you can pay a much lower capital gains tax.
3. What is a dividend play? Is it like a comedy play where the actors pay the audience?