OK, Karen - I’ll start the ball rolling. Understand that the following comments are just my personal thoughts about the question of dividends, I don’t have a “strategy” or anything like that.
Not long ago, prior to getting tuned in here I had no investment strategies whatsoever. I bought stock primarily based on Supernova recommendations, but not exclusively. Being retired and all, I felt I should also invest in some income producing equities (but, I wouldn’t go so far as to invest in bonds).
So, what was paying a pretty high dividend rate? Fossil fuel energy patch, tobacco, some investment banks and a random smattering of other stocks. I read some stuff posted by TMF that spoke highly of BBEP, APU and others. I also referred to Cramer’s recommendations. And I did some more digging and came up with some other high rate of return dividend stocks.
I bought up quite a few dividend tickers. Growth was not something I paid attention to. Then, the relatively sudden drop in oil rippled through the energy sector and I saw a rapid decline in the value of my investments And all of a sudden I was seeing dividends around 20% (but mind you, not 20% of the price I paid).
It’s not a loss until I sell (I comforted myself). This is a false premise. It is a real and undeniable loss. Around this time I started dialing in this board. I finally conceded that hanging on to these losers with the hope that oil will rise again (as it has always done so in the past) was not only a loss with respect to holding a these companies, but it also tied up the diminished capital such that I couldn’t put it to gainful work elsewhere.
I sold all of the energy and investment bank stocks at a very significant loss. I redeployed the cash employing Saul’s techniques, and to be candid, to some extent I just bought some of the stuff he held without a lot of analysis.
Today, I hold some companies that pay a dividend: AAPL, DIS, SWKS, a few others. I do not consider the dividend at all when making an investment decision. If a dividend is paid, it’s gravy, but it just doesn’t figure in the decision process. I am very happy with this mode of operation.