3 Prevailing Myths About Dividend Stocks

Are higher dividend yields always better than low ones? Are dividend stocks always safe? And are all dividends taxed the same? Dividend investing can be one of the most certain paths toward long-term wealth, but it's important to separate fact from fiction. There are several myths or misconceptions many investors have regarding dividend stocks, and we'd like to clear these up for our readers. So we asked three of our analysts to pick one of these popular myths about dividend stocks and explain why it may not be entirely accurate.

Brian Stoffel: One of the easiest dividend myths for beginning investors to fall for is the idea that higher yields are intrinsically better. Dan Caplinger: One false idea that many people have about dividend stocks is that they're safer than non-dividend-paying stocks. Matt Frankel: One myth or misconception about dividend stocks is that they're all taxed the same. In reality, dividends fall into two categories for tax purposes: qualified and ordinary

Source: Motley Fool

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