Why High Yield is a Hidden Danger

The higher the yield, the better the investment — right? Not so fast. The truth is, many high-yield dividend stocks are financial traps dressed as income engines.

The Psychological Bait

Retail investors often chase 7%, 8%, even 10% dividend yields thinking they’re buying freedom. What they’re actually buying is:

• 🔻 Unsustainable payout ratios
• 💣 Companies in financial decline
• 🚨 Price drops that erase gains

The Safer Truth: Dividend Growth Outperforms

Smart investors don’t just look at yield — they look at growth and safety. They want:

• 📈 Companies increasing dividends yearly
• 🏛 Long track records of stability
• 🤖 Sectors resistant to disruption (utilities, healthcare, infrastructure)

What to Buy Instead of Yield Traps

Look for stocks with 2–4% yield and a 10–15% dividend growth rate. Over time, they’ll outperform high-yield traps and preserve capital.

And if you want to automate that decision process, AI can screen out danger zones and calculate reinvestment velocity over decades.