Don't Doom Your Dividend Portfolio

Putting all your eggs in one basket Often, investors who gravitate to dividend stocks are on the more conservative side of the investing spectrum. Unlike bold growth investors who prefer companies that reinvest every spare penny back into their businesses to grow as quickly as possible, dividend-seeking investors look at the tangible return of cash to shareholders on a regular basis as a safety net against rash corporate action or even outright fraud. In that sense, some associate dividend stocks with safety. But putting together a diversified portfolio of dividend stocks requires some forethought. Otherwise, it's easy to end up being overconcentrated in particular sectors of the market and owning stocks that will move in lockstep with each other -- for good or ill.... Read more