"Investors love dividend stocks, especially high-yield varieties, because they offer a significant income stream and have substantial total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. For example, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%-10% for the increase in stock price"
"For Baby Boomers seeking retirement income, "safe" high-yield stocks can be a good idea, but they require a careful approach due to their specific risks. While they can provide attractive passive income streams and growth potential, retirees need to prioritize stability over chasing the highest yield, which can often be a warning sign of a company in distress. A diversified, balanced portfolio including both dividend stocks and less volatile assets is generally recommended over relying solely on high-yield investments."
High-yield dividend stocks can provide significant passive income and strong total return potential through dividends plus stock appreciation. Total return consists of interest, capital gains, dividends, and distributions realized over time, illustrated by a stock purchase example. Several companies yield 4% or more and offer attractive entry points and Buy ratings. Retirees should prioritize stability and avoid chasing the highest yields, which can signal distress. A diversified portfolio mixing dividend stocks with less volatile assets reduces risk. Short-term Treasury exposure via a 1-3 month T-bill ETF offers a conservative income complement.
Read at 24/7 Wall St.
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