Dividend Cut Alert: High Yield Dividend Growers Getting Too Risky

2025-06-11 11:30:00 ET

High-yielding stocks are a great source of passive income because you earn a higher cash flow yield from your investment than you would otherwise if you invest in a low-yield or no-yield stock. This also reduces the sequence of returns risks since dividends tend to be more stable and dependable month-to-month, quarter-to-quarter, and year-to-year than stock market performance. As a result, it becomes easier to confidently live off of your investments when you go the dividend route as opposed to simply gradually selling down shares of your portfolio to fund your living expenses and hoping that capital appreciation outweighs or at least keeps up with what you are having to sell to pay for living expenses over time. At the very least, it can help you sleep better at night during periods of market volatility, knowing that your passive income stream does not rise and fall with daily fluctuations in the market like it would if you were living off of selling shares of your portfolio....

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