Dividend Investing: Pros, Cons and Rules to Follow

Dividend investing is a profitable and proven method to generate solid long-term returns. But investors must be tactical when choosing the best dividend stocks.

Stacks of coins with a graphic of a positive stock chart and arrows pointing up.
(Image credit: Getty Images)

Dividend investing is an excellent and proven way to grow your wealth over time. When someone says they are a dividend investor, it means they buy common and preferred stocks of public corporations that share earnings with their stakeholders.

There are several great advantages to dividend investing, especially compared to other types of investing such as growth-stock investing or even REIT (real estate investment trust) investing.

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Mark R. Hake, CFA
Contributing writer, Kiplinger

Mark R. Hake, CFA, is a Chartered Financial Analyst and entrepreneur. He has been writing on stocks for over six years and has also owned his own investment management and research firms focused on U.S. and international value stocks, for over 10 years. In addition, he worked on the buy side for investment firms, hedge funds, and investment divisions of insurance companies for the past 36 years. Lately, he is also working as Chief Strategy Officer for a tech start-up company, Foldstar Inc, based in Princeton, New Jersey.