Avoiding the Yield Trap: Are You Too Focused on Generating Income From Your Investments?
Description
Having your investments pay you large dividends or yield sounds great. It’s truly passive income where money just shows up in your account without you having to do anything, and without you having to sell off any of your investments even when markets are down.
But what if you get too focused on maximizing dividends or yield in your portfolio? After all, there is no free lunch when it comes to investing. There are always tradeoffs, and it turns out that there are some pretty significant disadvantages for investors that just try to maximize their yield or dividends at all costs, and it can result in you actually getting a substantially lower "total return" over time, on your investments.
About Our Guest To help us learn what pitfalls to look out for when deciding on our investments, particularly when it comes to some of these very high yielding ETFs that you may be seeing recommended online, we have Chris Heakes.
Chris has over 14 years of experience in the investment industry. He’s a CFA, has a Master of Finance from the University of Toronto, and is a Director and Portfolio Manager at BMO Global Asset Management.
Chris is going to take us through what we should look out for so that we don’t fall for the yield trap.
We’ll also cover hidden fees that you may be unknowingly paying on some ETF, along with some arguably deceptive advertising to look out for that you may have seen here in Canada when it comes to your investments.
Lots to learn in this interview with Chris, so let’s jump right in.
You can see all the show notes, resources and links for this episode over at BuildWealthCanada.ca
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