Truth or False: High dividend yield equates to high total returns.
If you answered True you could be in for a bumpy ride.
It’s actually a common misconception that a high yield is a central element to the calculation of total returns, and the facts are clearly justified, a dividend yield that is considerably higher than other stocks could ultimately lead to a depressed share price.
I know, it’s awfully tempting not to swing for the fences when you see a double-digit yielding flashing “BUY ME”, but as I explained...
Source: Forbes
If you answered True you could be in for a bumpy ride.
It’s actually a common misconception that a high yield is a central element to the calculation of total returns, and the facts are clearly justified, a dividend yield that is considerably higher than other stocks could ultimately lead to a depressed share price.
I know, it’s awfully tempting not to swing for the fences when you see a double-digit yielding flashing “BUY ME”, but as I explained...
Source: Forbes