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Great points made above, but one I disagree with is looking at the current dividend yield relative to the price you paid. Maybe I'm overlooking something, but why would this be relevant to whether or not I should continue to hold a stock today?

This seems like another psychological trick that can make one hold onto a stock when there may be other better alternatives available (better dividend yield, higher likelihood of dividend increase, greater chances of growth, greater downside protection due to underlying assets, etc.).

I know nobody is suggesting using this as a single decision-making point, but I think the price I paid for a dividend stock has no bearing on whether or not I should continue to hold it, just like it should have no bearing on whether I continue to hold a non-dividend stock.

For example:

- I buy 10 shares of XYZ at $5/share.
- XYZ's price has appreciated, and it's now $20/share.
- The dividend yield is currently 1%.
- The current yield is 4% relative to my initial purchase.

That last bullet point is great for water cooler talk, but how/why should my buy price from the past (whether it was 10 years ago at $5 or last week at $21) impact my decision to hold XYZ today?

I'm not just being modest when I say that posters who I've seen make such comments (Hobed, BRD, even the venerable TMF1000) are MUCH smarter investors than I am, but to me this makes no sense.

So what am I overlooking?


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