Quote:
Originally Posted by Regorium
I tried to do this by investing in dividend darlings like Crescent Point Energy.
Definitely learned an expensive lesson about dividend investing. A lot of times, a high dividend is generally a good indicator of the level of risk you're actually taking on.
For example, even a strong company like Enbridge with a relatively high dividend is indicative of the level of risk that the company takes on. You're betting that you're not going to have a PG&E situation, and the high dividend is the reward you get for taking on that risk.
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Yeah and I guess that's part of what I mean when I say there is perhaps more uncertainty for investors with dividends than what many think. It depends on the dividend policy of the company and it varies widely. Some are paying high dividends to attract investors, some have a set dollar or percentage of profits, and still others vary things. The you get some paying stock dividends, some offering DRIP where others don't and things like that. It's definitely not as simple as "I'll just buy a bunch of companies paying north of 6%/year and call it a day."