Which do you think is better for long-term investing, growth or yield? If you are starting a new portfolio or you want to change what you have, what is the trade-off between growth and dividend stocks?
That's up to your strategies, goals and preferences.
However, the first rule is always protect your capital from losses.
If you take too much risk in an unseasoned stock for share price growth, you could lose a lot of money if it fails to perform. Oppositely, if you chase high yields, but the company behind the stock is financially not strong or unstable, the high yield could be a trap for you.
No one can predict the outcome of an investment. Even among professionals, if you were correct even 50% – 60% of the time in your investments, you'd be a legend. Economists who are correct on about one third of their predictions, would be considered successful.
You can improve your own chances of success with one stock that looks to have a good balance between growth and yield- Super Retail Group Ltd (ASX: SUL).
The specialty retailer has grown its business well over the past five years, yet recently retail trade and personal consumption are down. The stock is paying a 4.2% fully franked yield due to its fallen share price. Its auto accessories business Supercheap Auto is one business line. It also has the sporting and outdoor goods stores Rebel Sports, Amart Sports and BCF are a good mix of items consumers regularly buy to personalise their activities. That can drive revenue when consumer spending picks up.
Lower interest rates and fuel costs give shoppers more money for purchases. Analysts are looking for Super Retail Group to raise annual earnings in the high-single digits for the next few years, so now could be a good entry point before the share price recovers too much.
