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Holding period for dividend stocks

One of the most common issues that dividend investors face is the holding period for their dividend stocks. It seems that dividend investors are divided in two camps on the issue. One of the camps believes in active allocation of capital, where positions are continually adjusted depending on company performance, market performance or relative portfolio weights, to name a few reasons. In an era where it is possible to buy and sell dividend stocks within nanoseconds, holding on for more than a few years seems like eternity to some. The other camp is focused on the long-term holding of dividend stocks. The second camp believes in buy and hold investing, an arcane strategy, which is termed obsolete during bear markets, but is widely praised during bull markets. So what should the holding period of an enterprising dividend investor be?

In most cases, it takes time for a position to work in your favor. This is particularly true for dividend growth stocks, where low current yields coupled with strong dividend growth result in substantial yields on cost after several years of patience. Investors who focus on stocks like Procter & Gamble (PG: 62.17, 0.31), McDonald’s (MCD: 75.65, -0.45) or Johnson & Johnson (JNJ: 63.29, 0.06) despite their current yields, could generate sufficient dividend income streams over time.
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11 responses to “Holding period for dividend stocks”

  1. Alex says:

    Great web

  2. Hipolito M. Wiseman says:

    Thanks for sharing your ideas

  3. Pixie says:

    It is in reality a nice and helpful piece of info about stock trading. I’m happy that you simply shared this useful info with us. Please stay us up to date like this. Thanks for sharing.

  4. KOKO says:

    I will immediately clutch your rss feed as I can’t in finding your e-mail subscription hyperlink or newsletter service. Do you’ve any? Kindly let me know so that I may subscribe. I like your ideas on dividend investing!! Thanks.

  5. Lary says:

    I am investing into dividend paying stocks and I like your ideas on this web site. Thanks for posting!

  6. Andy says:

    I am scared trading, but I do not like slow investing. I know that may sound like “Get rich quick” but how can I boost may savings and money to invest more?

  7. Neoma Merson says:

    I do not believe in buy & hold strategy. see what’s happening these days!

  8. Robyn says:

    Associating the daily moves of the stock market with some event is a joke, but then the media needs something to do. The S&P just dropped 21.6 percent from 1371 to 1075. It will probably rally for a couple months to get all the suckers back in, then fall off a cliff and take all their money.

  9. Larry Urias says:

    i tried to pay rent on hope, but my landlord wants monopoly money. are the crooks in washington helping to prop this market again? it sure looks like somebody is making this market a fake leg up, while alcoa starts earnings and dissapoints they concentrate on hope and brush off earnings.

    wall street and washington is the same.

  10. Becky says:

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  11. Misty Linsay says:

    As the dollar drops – the market is not rising like it should. Why you ask? Because smart money is selling into it.

    Hold on kids – the risk is to the downside while all the retailers pile into longs but once they scare the @#$%&! out of everyone – then it will take off.

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