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Learning to Invest / My Dumbest Investment

URL:  http://boards.fool.com/the-problem-i-see-with-only-looking-at-the-30239077.aspx

Subject:  Re: Groupon Inc Date:  9/2/2012  8:28 AM
Author:  RHinCT Number:  3579 of 3812

The problem I see with only looking at the dividend in relation to the cost basis occurs when the dividend stagnates while the stock price rises. If the dividend was 4% when you bought it, and the stock rises by 75% while the dividend remains unchanged, you are only receiving 2.29% on the current value. If the dividend is important to you then you might do better to sell that stock, realizing the gain in value, and invest the proceeds (75% larger than when you started) in another stock with a better current return.
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