At 18, investing in dividend stocks makes no rational sense. Unless you have a few million in cash and want to live off it, then look for stable dividend payers and enjoy it.
•
11
•
3Sem.
@Psychedelic_Sunflower Quatsch.
••
3Sem.
@Psychedelic_Sunflower If the motivation is psychological, then it also makes rational sense to want dividend stocks.
••
3Sem.
@Metis But in this example, it is completely inappropriate to focus on the German automotive industry. The dividends of these companies are anything but sustainable...
••
3Sem.
@gqx That's a whole other topic, whether the selected shares are the right ones at all. :D
••
••
@Metis I classify psychological motivation as irrational. Rational is to look for an investment strategy according to the facts that has a higher probability of yielding a higher return.
••
3Sem.
@Psychedelic_Sunflower The return potential and quality of a company is not determined by whether it pays a dividend or not.
••
3Sem.
@Psychedelic_Sunflower However, it is extremely important to have knowledge of your psyche so that your emotions don't destroy your strategy. Making a decision rationally doesn't help you if you don't follow through with it under strong emotions. And knowing this and taking your emotions into account is also rational in the end.
••
@FairValue No, not that, but companies that pay out a relatively high dividend have generally already experienced their greatest growth and will underperform the broad market in the long term. You buy companies despite the dividend, not because of it. Unless you want to consume the dividends. And even then, it may make more sense to sell some of the shares.
••
@Metis That's why emotions have no place in the stock market. Emotions are not rational, and so neither is the action that tricks them. However, a dividend strategy is still better than a savings account or doing nothing, but it cannot be justified rationally and without emotion (if you are looking for higher returns)
••