Dividend Investing

I have been considering changing my portfolio to include dividend stocks / ETFs with at least a 4% dividend and reinvesting that dividend each quarter. I am considering making higher dividend stocks about 30% of my portfolio. I am 32 and hope to retire by age 60.

I plan on managing risk by creating 500 dollar positions in different companies. With compounding I believe I would receive the following returns over a 27 year period.

Dividend 4% - Compounded for 27 years provides an average return of 11.72%

Dividend 5% - Compounded for 27 years provides an average return of 19.12%

Dividend 6% Compounded for 27 years provides an average return of 29.96%

I used https://www.dividendladder.com/tools/dividend-calculator/ to find these compounded yields.

These returns are with no increase in dividend payments over a 27 year period. I understand stocks and ETFs with higher dividend do have risks, however, I am hoping to minimize that risk with having many small positions in different sectors of the economy.
I also understand that companies paying dividends are not putting the money they are paying out in dividends into growing their business. With these investments I would not be concerned with growth but instead the company maintaining current dividends or increasing them.

I currently own T, HSBC, SPYD and I have been considering adding positions in IRM, STAG, MPW, APLE, PEGI, WPC, VTR, ED, ABBV.

I feel like there must be a flaw in my logic, what am I missing with this plan?

Submitted April 15, 2018 at 07:36PM by CriticalFish https://ift.tt/2HBNXnW