3 Reasons to Avoid Dividend-Paying Stocks
Even if you don't own any yourself, it's easy to see the appeal of dividend stocks -- any investment that puts cash in your pocket right now has its obvious upside, even if those dividend payments aren't enormous. As the old cliche explains, a bird in the hand is worth two in the bush.
But there are certainly some sound reasons an investor might want to make a point of steering clear of dividend-paying stocks, even if only for the time being. Here's a rundown of three of the top reasons they may not be in your best interest right now.
It's easily the most obvious reason, but needs to be stated all the same: There's an opportunity cost in owning dividend stocks that you don't actually need dividend payments from right now. That cost is the returns you'll be missing out on by not owning growth stocks you could have otherwise invested in with that capital.
Source Fool.com
