Warning: These 3 Dividend Darlings Could Ruin Your Retirement

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It’s a pitfall that can slash your income and your nest egg overnight—and this hidden trap is particularly dangerous to your financial health right now.

I’m talking about a snap dividend cut, something poor folks still sitting on General Electric (GE) shares learned again last week, when the stock tanked 9% in a single day after GE slashed its quarterly payout 92%—to a token penny.

The sad part is, anyone could have seen this massacre coming for miles.

All you had to do was look at GE’s cash flow, which kept staggering after the company sideswiped investors with a 50% dividend cut a year ago.… Read more

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What could be better than a booming business that feeds an ever-growing dividend?

How about a “wide moat” to protect the payout’s upward trajectory? We’ll rank five dividend growers and their competitive advantages in a minute. First, let’s talk about disruption.

Tesla (TSLA) CEO and “Chief Disrupter” Elon Musk recently stormed the castle of investing theory when he challenged the importance of moats – the idea of corporate competitive advantages that make it difficult for other companies to whittle away market share.

It’s a skirmish that brought longtime “wide moats” pitchman Warren Buffett into the fray, as the Berkshire Hathaway (BRK.B) CEO and Musk had sparring words for one another.…
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The Federal Reserve’s increased aggression over the past couple of years has finally come home to roost. The yield on the 10-year Treasury recently rocketed above 2.8% – a four-year high – while the 30-year cleared the 3% mark.

That’s bad news for investors in many traditional dividend-paying blue chips.

The 10-year T-note might as well have been a “high-yield” savings account the past few years, offering almost laughable income of less than 1.4% as recently as 2016. That kind of environment gives investors “yield goggles,” making even no-growth stocks look attractive as long as they’re paying out near 3%.

Just look at the performance of the Consumer Staples Select Sector SPDR (XLP) – a collection of companies such as Procter & Gamble (PG) and Coca-Cola (KO) – against the 10-year Treasury rate.…
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About Author

Brett

Hi, I’m Brett Owens – and I’m a financial junkie. My “problem” started incollege, when I got a little dose of the stock market – man, was I hooked…in no time, I was reading the Wall Street Journal religously.

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