Richmond
Dividend paying stocks can provide the opportunity for long-term price appreciation combined with a current income stream. When assessing assets that pay dividends, a number of factors must be kept in mind, including the current slope of interest rates as dictated by the Federal Reserve as well as current valuations. While one might be tempted to simply buy an asset with a high dividend, oftentimes dividends are high for a reason which can mean there is excessive risk in the asset. Overall return for most investors is the primary goal which means capital value plus income stream is the final measure of investment success. Investing in assets that simply pay a high dividend could potentially expose you to significant downside fluctuation and that needs to be carefully analyzed on a case-by-case basis before any investment is made. Another important consideration is the income stream needed from a given portfolio strategy and that will vary based on each person’s situation. As a planning-based firm, Destination Wealth Management can help you determine the income necessary for your unique situation and assist you in developing a strategy that helps you meet your income needs. The assessment includes an analysis of current pensions, current portfolios, Social Security payouts, and other income streams matched against income or the cash flow requirements on an ongoing basis. By looking at both income and expenses, one can determine if the dividend strategy is appropriate and what payout levels are needed based on your situation. We invite you to learn more about DWM and our planning capabilities as you make judgments about your dividend investment strategy.
