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How to Stop Overspending of money? Investors desire high return on investment. This is the reason why majority focus on capital appreciation. Less people prefer to buy stocks for dividend income. Some even find it surprising that there are investors who invest in stocks just for dividends. It is a fact, capital appreciation is more desirable among masses than dividend yield. The reason is simple, dividend yields of stocks are low compared to potential price appreciation.
But it is important to note that, price appreciation is less certain as compared to dividend yield. Champion investors love dividend paying stocks, why? What makes top dividend paying stocks so likeable? High growth rate is a priority for majority. But expert investors prefer to have a balanced portfolio.
Portfolio focusing only on capital appreciation is not good. Inclusion of dividend paying stocks has a balancing effect on ones investment portfolio. Dividend income is one of the most desirable passive income source. People who believe in it, also loves stocks that pay dividends.