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'Dangerous Dividend' Stocks Burn Investors In 3 Ways; Lessons From GE, Kraft Heinz
Starved for income and facing bad news on interest rates, some income investors might chase high dividend stocks like Kraft Heinz (KHC). But reach indiscriminately for yield, and you might get burned.
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Losses From Dividend Stocks Can Incinerate Returns
Dividend yield chasers couldn't resist local telecom CenturyLink (CTL) coming into 2019. How can you blame them? The company, which offers telephone and Internet services in rural areas in 37 states, yielded 14.3% on Jan. 1, more than any other stock in the Standard & Poor's 500.
What could go wrong? Unfortunately for yield chasers, plenty. CenturyLink stock dropped 23.2% so far this year, not only wiping out the 2019 expected yield, but scalping portfolios by another nearly 9%. Keep in mind simply owning the S&P 500 would have delivered a nearly 19% gain.
Making things worse, CenturyLink cut its dividend in half starting with the March payment.
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https://www.investors.com/etfs-and-funds...yptr=yahoo
Starved for income and facing bad news on interest rates, some income investors might chase high dividend stocks like Kraft Heinz (KHC). But reach indiscriminately for yield, and you might get burned.
...
Losses From Dividend Stocks Can Incinerate Returns
Dividend yield chasers couldn't resist local telecom CenturyLink (CTL) coming into 2019. How can you blame them? The company, which offers telephone and Internet services in rural areas in 37 states, yielded 14.3% on Jan. 1, more than any other stock in the Standard & Poor's 500.
What could go wrong? Unfortunately for yield chasers, plenty. CenturyLink stock dropped 23.2% so far this year, not only wiping out the 2019 expected yield, but scalping portfolios by another nearly 9%. Keep in mind simply owning the S&P 500 would have delivered a nearly 19% gain.
Making things worse, CenturyLink cut its dividend in half starting with the March payment.
....
https://www.investors.com/etfs-and-funds...yptr=yahoo
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