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Retirees Stop Chasing Yields - The Ultimate Straw Man

Published Thu, 26 Sep 2019 08:35:00 -0400 on Seeking Alpha

Co-produced with PendragonY and Treading Softly
When considering retirement, or investing in general, large juicy yields can be compelling to drive investors. The key reason investors love high yielders is because they can substantially reduce how much they need to save for their retirement. An accusation flung at many investors and retirees’ building an income portfolio is that they are "yield chasing".

This is often a Straw Man argument used against anything considered "high yield".
Investor: I think this stock has the potential for attractive returns.
Opponent: It has a dividend yield over 10%. You are yield-chasing and that never works out.
For some if the yield is north of 5% they consider it dangerous. Other may buy a 5% yield but double digits are a double no-no. Generally, these critics are speaking from a position of bad experiences in this space. They've been burned by past mistakes, jumping into a high yielding security without proper due diligence. Like a toddler touching a hot stove, the burn leaves a reminder in their brain: high yield = pain and misfortune.
As a Retiree, you've had a long life filled with experiences that you use to create your initial opinions. Some of you have never invested individually and are risk averse or more conservative. Others among you have invested for capital gains instead of a steady dividend income flow. So you hear "yield chasing" and worry you're doing it all wrong. Here at... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
VERMILION ENERGY 15.98   9.3 1.72 2.09 13.10
ALLIANCE RESOURCE PARTNERS L.P. 15.86   4.5 3.49 2.16 12.95
MACERICH 33.33   43.9 0.76 3.00 8.91
CENTURYLINK 13.53   0.0 -7.43 1.00 7.94
AMERICA FIRST TAX EXEMPT INVESTORS LP 7.72   12.9 0.60 0.50 6.62


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