don’t buy dividend stocks without reading the 10K report, without knowing which stock has moat (or) not, and don’t pay the higher price which leads to paying you a low dividend.
big mistake!
lot of people get excited when comes to investing in dividend stocks but here is the truth when you buy any dividend stock, which makes your investment lose again and again until knowing whyou’reour doing.
for this reason, son Warren Buffet said that “risk comes from not knowing what you’re doing ” If you don’t know what you’re doing when buying any type of dividend stocks, then surely it leads to a high level of risk.
am Shathir a stock investor of ruleinvesting.com, here I give you the 4 reasons why that makes you lose again and again even when you buy high-paying dividend stocks in the market.
don’t buy dividend stock without reading 10k:
10k report is the annual report of the company, which is released from the original company to the security and exchange commission for investors.
10k report tells you everything about how is the company doing. how much time the company paid dividends in the last ten years? what are the issues and conversations going on inside the company? the company have chance to profitable in the coming days (or) not ?
whatever the reason you have for buying the dividend stock? if you didn’t read the 10k report and understand the company, then you may end up with a loss in your investment in the long run.
however reading shareholder letter also may help you to understand what the issues the CEO facing inside the company .
don’t buy those dividend stocks without a moat
what is a moat? moat means protection to business which other competition cannot attack from outside .so let’s take an example some of the company to make you clear.
take an Apple company it’s have a strong switch and brand moat. apple is a worldwide strong brand and also other people can’t switch from Apple to other mobiles easily, which means Apple has high-level unique fans for their brand.
this business can’t easily fail, Facebook is a stable company. so what is the benefit of investing in this type of moat stock? you can be 100% sure the stock never goes easily bankrupt.
so now again I gave you another example industry which means amazon.com, amazon has a strong toll bridge moat, the business competitors like eBay, aliexpress, etc.. never able to compete with him because he has a high level of product investment.
so the stock has no reason to go bankrupt. so before investing in dividend stocks check the moat. otherwise the stocks have chance to go bankrupt quickly .
don’t buy dividend stocks at high price
the big mistake people make when buying dividend stocks, is most people don’t buy the stock at the correct price, they don’t know the difference between value and price of the stocks.
who buy the stock at value, make higher dividend and higher returns on their investment funds. if you didn’t buy the stock at the correct value, then you always receive very low dividends and low returns from your investment.
moreover buying stock at your desired price leads to buying at a higher price and if the stock goes down again and again , so can’t control your fear of emotion during investment. which leads to the sale of the stock at a loss.
whatever the reason you think now, buying the dividend-paying stock at a higher price leads to a total loss from your investment, if you want to know how to buy the stock at value than click the link to learn more .