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Strategies & Market Trends : Dividend investing for retirement
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To: gregor who wrote (6058)10/11/2010 11:37:50 PM
From: Elroy3 Recommendations  Read Replies (4) of 34328
 
I don't think yield on cost should have anything to do with a decision to hold onto or sell an individual security. The stock should be evaluated on its present merits, not on what you paid for it.

Ignoring capital gains taxes, if stock A has a current price of $10 and is currently paying a dividend of 30 cents per year, it doesn't matter whether you paid $1 for it 10 years ago or paid $20 for it a month ago. You should hold or sell based on the company's current situation, not based on your cost basis.

If you have the time to do the research, I'd say the main decision in selling a given stock is whether you have an alternative stock to buy with better prospects for dividend growth and a higher current yield. What you paid for the given stock that you might sell is immaterial to that analysis.
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