7 Secrets to Successful Income Investing

Secret #2 – Be an Average Joe

To avoid getting sucked in by an unsustainably high yield, you need to know what a sensible yield is for the type of investment you’re considering. Generally, a below-average yield means a low level of risk, while an above-average yield indicates an added element of risk.

If you buy a stock with a current yield far above the norm for its industry, you may be inviting a possible dividend cut. On the flip side, a company with a below-average yield is likely growing faster than its peers. It may make sense for you to go with the lower yielding investment in hopes of receiving larger and faster dividend increases down the road.

NEXT – Secret #3