Posted by Frugal on June 15th, 2012
Anticipating the slowdown in economy, I’ve stayed away most of the energy-related companies, including these high dividend companies. High dividends are good only if they last, and with natural gas price falling to an extremely depressed level, ERF announced a 50% cut in its monthly dividend a couple of days ago.
With this announcement out, and possibly other related companies (PGH, PWE, PVX, etc) to follow, I think it’s worth to take a look at them now. The summer/fall is seasonally bad for stocks, so you don’t want to get too aggressive, but stay patient.
High dividends (or high potential return) always equal to high risks. This is one of the very few golden rules in investing. Tread carefully.
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