Risk of high-dividend stock investment

In the world of stock investing, high dividend yield stocks, tends to yield is higher than any other brand, have been confirmed worldwide.

The most famous, of the New York Dow 30 stocks, it is the "Dow of the dog" strategy of holding the 10 stocks in the annual dividend in descending order. The portfolio consisting of dogs of this Dow, than normal NY Dow average, and he has data that annual yield is more than about 2-3%.

Similarly in Japan, portfolio that were made to collect the dog similarly high dividend companies of the Dow using the 30 species TOPIX core, there is data that fit the results that exceed the TOPIX itself (from diamond ZAI).

Than May 14, 2010 in Japan, ETF (TSE Dividend Focus 100: stock code 1689) to distribute only invest in high-dividend stock of the Tokyo Stock Exchange is expected to launch begins. It seems that it was made aware of is the US "Dow Jones High Dividend Index (DVY)", can be expected higher yields than possess normal TOPIX · ETF (such as 1306) with a high dividend effect That's right.

However I would like to note, just to buy in a simple dividend yield is high individual stocks, you should be aware that it is fraught with another risk.

First, dividend is a problem that greatly varies every year. Especially in emerging market stocks such as JASDAQ and Mothers, sometimes but dividend yield also appears stocks climb to more than 10%, these stocks is almost definitely the next fiscal and decreasing dividends, it will pay no dividend tumble if the poor.


The dividend yield is high, not because the performance is good, we have stock prices decline significantly for performance is having not as or any problems poor, not only in relatively dividend yield is higher case it is often. If generally exceed 5% decreasing dividends risk is high, almost certainly next fiscal If such exceeding 10% would be decreasing dividends.

The stock price data of "Yahoo Finance" that many people are available, it is important to note that the very slow update of corporate information, such as dividends. To examine the dividend yield, but should match against even the data of the securities company rather than Yahoo Finance, the best bet is that you can pick up from the IR information in the HP of the relevant companies. Because sometimes that is also stated policy of in IR "dividend payout ratio", and, combined light of the criteria, you should stick is expected whether there what extent is decreasing dividends risk of the next fiscal year.

If another add, Japanese companies compared to US companies, the first place on dividend yield is low, easy tendency to decreasing dividends is strong. Such as P & G and McDonald's in the United States, no less companies that continue to dividend increases over the decades, but such companies do not first find him in Japan.

In particular, since emerging market stocks such as JASDAQ Mothersbaugh is weak performance fluctuation is intense management foundation, if you take a high-dividend strategy in Japan strain, was selected more or less limited to the large stock of low TSE part of decreasing dividends risk it is a good idea.