The Trouble With Dividends

If you don't have a pension, and don't expect Social Security to meet your retirement needs, income investing can become a powerful plan B. But you're not careful, you could end up blindsided by some of this strategy's notable drawbacks. Here are some to consider:

1. Inflation
2. Taxation
3. Overconcentration

These cautions shouldn't keep you from investing in strong dividend-paying stocks. The best of them will pay you steadily, even as they rise in value on their own. For all their potential pitfalls, income stocks remain some of the most attractive investments on the market.

Source: Motley Fool


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