Damn. Damn. Damn.

I’ve been at this investing game for decades, but I still went out and made a mistake.  Luckily, it didn’t hurt me financially and I took the necessary steps to clean up the mess.  So, what did I do?  I bought a  stock paying less than a 2% dividend that also had a struggling chart.

Simple rule I live by: Don’t buy a stock paying less than 2% because savings accounts can pay you 2% with no risk.  There is no reason to buy a stock paying under 2.5% unless it also has favorable stock growth.

The purchase mistake I made was HRL.  Sure, HRL is up about 4% on the year and pays 1.9% yield.  That’s not too bad and the risk is low. But, why? I could just drop money into my Marcus savings account for a 2% yield with zero risk.  What’s left is the YTD 4% gain.  Really?  Buying and holding SPY would have you at 20% YTD.

There is no reason to buy a dividend stock just because it’s ‘safe.’  It’s important to see the big picture and follow the money.

HRL SPY

Action I took today:

Look, I like HRL.  I may be back at some point in the future, but my dividend approach doesn’t quite support it at this time.   For now, I’ve removed it from my M1 Dividends Growth Account.

Current holdings: