Recently I was doing some reading on a dividend investing blog. As I began reading the article, something stood out to me right away and it didn’t really set well to me. While I do understand that everyone’s process of analyzing stocks is different , it doesn’t mean that I have to agree with them. This particular investor was looking for some new investing ideas and he was using a stock screener, which is perfectly fine but what didn’t set right with me was his first prerequisite was that the stock needed to pay a dividend in February.
Now for me I find this to be totally absurd because by looking for a company that pays a dividend in a certain month, you are eliminating the possibility of a lot of other great companies that you could invest in. I can only see 1 reason why someone may be screening stocks this particular way.
First they’re like me and keep pretty good track of their investments. One of the ways that I keep track is that I chart out my projections for my dividend income that I can expect for the current year. Now if they keep track of their dividend income they may notice that during a certain month of the quarter there is an imbalance between the amount of dividend income. If they are investing to create income to live off of in retirement, I see where they may feel compelled to want to even out the amount of dividend income earned every month but I still don’t think that it is the best plan.
I would rather look for the best investments to put my money to work for me regardless of when the dividend is paid. In retirement, if I were to receive a little more income one month, I would see no reason not to just store it in my bank account until I needed it. If the bank account were to build up a surplus of cash, then I would just turn right around and invest that surplus into some more dividend paying stocks.
So to answer the question that I propose in the title of this post, I don’t really care when my dividend is paid. I can make use of the cash regardless of when it is paid to me.
If there are other reasons why a person would be screening stocks for a certain month, I would be very interested to hear about them!
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