 |
| Dividend Tips |
Many investors believe they have to swing for the fence in
order to have impressive returns over their investing life. The problem is that hitting it out of the
park on a regular basis is incredibly difficult. The occasional home run won’t be sufficient
to offset all the losses, large and small, that happen between the big
hits. Those frequent losses drain your
returns and possibly your investment account.
The occasional big return is a low probability
event while frequent losses are high probability events. To pin your long-term investment strategy on
a series of low probability wins is betting against the house. You’re gambling.
Investing in multiple high probability events e.g.,
dividends, even though smaller in production, produces better long-term results. Those small, high probability events add up. They also minimize the possibility of taking
an outsized loss which can easily happen chasing big wins. Large losses are difficult to make up and can
put you behind the power curve which is dangerous investment territory. Avoid the danger. Minimize your losses to maximize your
gains. Your retirement self will thank
your investing self for doing so.
No comments:
Post a Comment