Comments on: Dividend Investing: Two Common Questions? http://www.dividendtree.net/commentary/dividend-investing-two-common-questions/ My journey of planting dividend investment seeds and watching it grow.... Thu, 31 Mar 2011 20:45:33 +0000 hourly 1 http://wordpress.org/?v=3.1 By: Josh http://www.dividendtree.net/commentary/dividend-investing-two-common-questions/comment-page-1/#comment-303 Josh Tue, 16 Mar 2010 12:27:41 +0000 http://www.dividendtree.net/?p=1308#comment-303 If we assume that dividends drive the stock price, there shouldn't be a good reason to sell a stock with rising dividends. If we are expecting dividend cuts or elimination, or a stagnating dividend, either driven by poor acquisitions or low earnings growth, that poses a good reason to sell. There's no reason to sell a perfectly good dividend stock though. If we assume that dividends drive the stock price, there shouldn’t be a good reason to sell a stock with rising dividends. If we are expecting dividend cuts or elimination, or a stagnating dividend, either driven by poor acquisitions or low earnings growth, that poses a good reason to sell. There’s no reason to sell a perfectly good dividend stock though.

]]> By: Matt http://www.dividendtree.net/commentary/dividend-investing-two-common-questions/comment-page-1/#comment-296 Matt Thu, 25 Feb 2010 19:13:03 +0000 http://www.dividendtree.net/?p=1308#comment-296 Good post. In my opinion, a good reason not to sell an investment even if it is currently overpriced is that taxation will reduce gains. When I'm considering whether to sell a long-term investment due to it being overpriced, I have to ask myself, is this stock so overpriced at the moment that even after I sell it and pay taxes on my capital gains, can I still identify an investment that will give me better gains with my tax-reduced cash? Only if the answer is yes (and with an extra margin of certainty to make up for the hassle) do I sell my current investment and buy the other investment. Good post.

In my opinion, a good reason not to sell an investment even if it is currently overpriced is that taxation will reduce gains. When I’m considering whether to sell a long-term investment due to it being overpriced, I have to ask myself, is this stock so overpriced at the moment that even after I sell it and pay taxes on my capital gains, can I still identify an investment that will give me better gains with my tax-reduced cash? Only if the answer is yes (and with an extra margin of certainty to make up for the hassle) do I sell my current investment and buy the other investment.

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