Dividend stocks as an attractive investment – but no return without risk

by time news

2023-09-22 17:33:56

Dividend aristocrats – that sounds noble. In fact, this term hides a special class of securities: these are companies that pay a dividend every year. There is no precise and crystal-clear definition – except that the profit share is paid every year. For some they are aristocrats if this period lasts for at least ten years, for others it is 15, but there are also 25 years. In some definitions, the ongoing payout is enough; for some, the stocks only become aristocrats when they increase the dividend every year. Sounds tempting, does that make them worth buying?

A lot of discipline

Inken Schönauer

Editor in business, responsible for the financial market.

“The choice between a dividend strategy and other investment approaches depends on an investor’s individual financial goals and risk tolerance,” says Christian Kahler, managing director of the fund boutique Kahler & Kurz Capital. However, it is worth noting that the discipline that comes with pursuing a long-term plan to generate regular dividend income can provide a solid foundation for building wealth. “Ultimately, this is comparable to the disciplined repayment of debt to pay off a mortgage – only on the credit side.”

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