Don’t save for retirement! 3 reasons why I’d rather buy dividend stocks today

first_imgDon’t save for retirement! 3 reasons why I’d rather buy dividend stocks today “This Stock Could Be Like Buying Amazon in 1997” Peter Stephens | Sunday, 2nd February, 2020 Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Planning for retirement can be a difficult process. For example, living within your means can be tough – especially with the cost of living being high. Then, deciding what to do with your spare capital can be challenging at a time when interest rates are relatively low and cash savings offer disappointing after-inflation returns.As such, now could be a good time to consider buying dividend stocks. They offer higher income returns than cash savings in many cases, while their potential to generate rising dividends could make them even more attractive in the long run. In addition, their scope to deliver capital growth could make a positive impact on your retirement plans.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Income returnDespite the global stock market experiencing a bull market which has lasted for over ten years, many shares offer attractive yields at the present time. This may be because of the ongoing risks facing the world economy. The threat of a global trade war and geopolitical risks in the Middle East appear to have caused investors to adopt a cautious attitude towards shares in recent months. As such, there may be relatively high yields on offer across a variety of sectors.Certainly, dividends are less robust than the income return on cash savings. However, diversifying across a range of stocks could reduce overall risk. And, with the difference in return between cash and dividend stocks being relatively high, income shares could be more attractive on a risk/reward basis.Dividend growth potentialAs well as high income returns, many stocks offer dividend growth potential. This could mean that while dividend shares produce a higher income return than cash today, the gap between the returns of the two assets widens in the coming years. Interest rates could rise at a slow pace, while continued economic growth may lead to many stocks being able to afford higher annual shareholder payouts.Identifying companies that could deliver dividend growth could mean that investors focus on factors such as their track record of rising shareholder payouts, as well as their financial strength. Furthermore, the headroom a company has when making its dividend payments may provide guidance on whether it can afford to pay a higher proportion of profit as a dividend in future.Capital return prospectsAlongside the income appeal of dividend shares, the prospect of capital growth could make them even more attractive than cash savings. With interest rates being low, companies that offer a high yield and the prospect of dividend growth may become increasingly popular among investors. This could lead to their shares becoming increasingly in-demand.Furthermore, the payment of a rising dividend may signal that a company has a solid financial position. It may also convince investors that its management team is confident about its future prospects. This can lead to higher overall returns that improve your chances of building a sizeable nest egg for retirement. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this. Enter Your Email Address Image source: Getty Images. See all posts by Peter Stephenslast_img read more