The point isn’t that dividend paying stocks are inherently bad. All of my clients own broadly diversified portfolios with many dividend payers in their allocations to equities. The point is dividend stocks are just that—stocks. They are not structured like bonds and should not be presented to clients as an apples-to-apples substitute for bonds or as a small step up on the risk scale.
Next month, I’ll run through a few common misconceptions outside the investment arena. I’m sure readers encounter a few misconceptions that seem to recur frequently. I’d love to hear about them.
Dan Moisand, CFP, will be speaking at Financial Advisor's Inside Retirement conference in Las Vegas on September 26-27. He has been featured as one of America’s top independent financial advisors by Financial Planning, Financial Advisor, Investment Advisor, Investment News, Journal of Financial Planning, Accounting Today, Research, Wealth Manager, and Worth magazines. He practices in Melbourne, Fla. You can reach him at www.moisandfitzgerald.com.