Glitch

When to Sell Dividend Stocks

This isnt a case of "buy high, sell low", its a case of basing a decision on what happened yesterday rather than what happens tommorrow. That the dividend payout was higher yesterday is irrelevant to whether the stock is worth holding tommorrow.

You still walked away from a 8%+ yield. Unless you moved that investment money into another option with a similar dividend yield, this move was made purely out of spite. In fact, to continue 'growing dividends' and replace the income BofA cut, you'd have to reinvest the proceeds in a stock with a dividend yield around 18%. Good luck with that.

Punishing BofA for cutting their dividend in no way helps you going forward. Sell it because you dont like the business's future outlook or because other investments offer more potential or because some other stock will pay you a higher yield, but dont sell just because it is paying you less. Good investments are only "good" in relation to the alternatives, and BofA's 8% yield is still near the top.

And unlike Bob - who does state a good case in his post - I dont think BofA will cut their dividend any further, atleast anytime soon. Cutting a dividend hurts a compay's reputation, cutting a dividend twice in less than a year will devistates it. I believe the first cut was made to a level they were confident they could maintain going forward. Any further cut will be due to a lack of available cash, not because the yield is 'too high'.