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The 2 Worst Mistakes Dividend Investors Keep Making

The article from Seeking Alpha titled "The 2 Worst Mistakes Dividend Investors Keep Making" discusses common pitfalls that dividend investors often fall into. Firstly, it highlights the mistake of chasing high dividend yields without considering the sustainability of those dividends. High yields can sometimes be a red flag for companies in financial distress, potentially leading to dividend cuts or eliminations. The second major error is the lack of diversification, where investors put too much capital into a single stock or sector, increasing risk exposure. The article emphasizes the importance of understanding a company's financial health, including its payout ratio, free cash flow, and overall business stability, before investing. It also advocates for a well-diversified portfolio to mitigate risks associated with individual stock performance or sector downturns. The piece concludes by suggesting that investors should focus on total return, which includes both dividend income and capital appreciation, rather than just the yield.

Read the Full Seeking Alpha Article at:
[ https://seekingalpha.com/article/4743078-the-2-worst-mistakes-dividend-investors-keep-making ]