| The Knowledge:
| Some stocks are classified as income stocks, because they pay higher than average dividends, and investors, especially the elderly and retired, buy these stocks for the purpose of current income. Careful attention must be given to these stocks, because a high dividend yield does not always insure safety. For example, the price of a stock may have fallen over concerns about the safety of the dividend, thus a high yield is the result. In addition, the stock could be in an industry that is not favored and is believed to have no future. In order to avoid mistakes, investors should buy quality stocks that have had a steady trend in rising dividends.
See also:
Growth Stocks
Value Stocks
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