The 5%+ dividend stocks could yield more headaches and heartaches than profits.
Dividend stocks tend to be the foundation for most
retirement portfolios. Investors have a bounty of reasons to choose dividend
stocks over non-dividend-paying companies; the outperformance of
dividend-paying stocks over the long-term relative to non-dividend payers is
just one. Dividend stocks often have proven business models and clear long-term
growth outlooks, and dividend stocks help hedge your downside during inevitable
stock market corrections. Perhaps best of all, dividend payments can be
reinvested into more shares of dividend paying stock. This process, known as
compounding, results in a bigger dividend payment and even more shares of stock
in a repeating pattern.
Ideally, dividend investors want the highest yields they can
find for the least risk possible. This means finding high-yield dividend stocks
-- generally stocks with a yield of 4% or higher -- that can be bought and held
for a long period of time.
Unfortunately, not all dividend stocks were created the
same. Some are harboring dangerous deteriorations in their underlying business
models that provide investors with only a false hope of juicy returns. Here are
three such high-yielding dividend stocks that I'd surmise are the stock
market's most dangerous.
Continue to read at The Motley Fool to find out which stocks
Sean Williams think to be the stock market's most dangerous high-yield dividend
stocks…