3 Reasons to Avoid Dividend-Paying Stocks
Do you like investment income? Most people do, even if their plan is to invest that income in other assets like growth stocks. That's why it's not unusual to find dividend-paying stocks even in a growth investor's portfolio. Quality dividend stocks can keep cranking out their payments in turbulent times, providing funding for new picks while the market's down.
Before you start adding dividend-paying stocks to your portfolio simply on principle, though, you may want to rethink the idea. While doing so has its merits, there are reasons you may still want to avoid dividend-paying stocks as well.
Regardless of your plans for any dividend payments, know that they may create unwanted taxable income for the tax year in which they're received.
Source Fool.com
