Beware High Yielders!
A good program to watch is Jim Cramer on CNBC at 6 PM daily. He also has published some very good books on the topic of investing. He talks about artificially high yielding stocks and companies. Usually when a company issues an unusually high yield it is not sustainable unless their business is really going gangbusters.
Most time it is an indication of some sort of flaw in the business itself. A 3 or 4 % yield is a solid one usually but when the yield goes up above 5% beware, something isn’t right. As for what they are, there may be many answers to that question. Listen to the conference call of the company. Read information in the company’s SEC filing. As the old saying goes “if it sounds too good to be true, it probably is”.
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