High-Dividend Yield Stocks: Here's What May Be Wrong With Them

What’s the point of investing in dividend stocks if it’s not to earn high-dividend yields? The main appeal of investing in dividend stocks is definitely to build a passive source of income. Too often, low-yield dividend stocks are dismissed to the profit of high-yield dividend stocks. Investors are often greedy and look at short-term income. Most dividend stocks are paying a dividend yield between 2% and 4%. In my own terms, stocks paying higher than 4% are called high-yield dividend stocks. Are you part of those who have fallen into this dividend trap? We call the high-yield dividend stocks a dividend trap as many investors buy these stocks for the yield but don’t look at the fundamentals. Therefore, they are receiving high-dividend payouts, but the underlying value of their investment is melting down faster than a GI Joe in the microwave. Warning: it’s not because a dividend is higher than... Read more