Is It Okay to Hold a Stock Forever Just for the Dividends?

The Smart Investor17:30

“Is it really profitable if I don’t sell, and just hold onto a stock for decades?” Many investors ask this question, even when the stock they are holding continues to pay dividends regularly. ...

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GMT+8&nbsp;&nbsp;&nbsp;<a href=https://thesmartinvestor.com.sg/is-it-okay-to-hold-a-stock-forever-just-for-the-dividends/><strong>The Smart Investor</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>“Is it really profitable if I don’t sell, and just hold onto a stock for decades?” \n\nMany investors ask this question, even when the stock they are holding continues to pay dividends regularly. \n\n...</p>\n\n<a href=\"https://thesmartinvestor.com.sg/is-it-okay-to-hold-a-stock-forever-just-for-the-dividends/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SG9999003826.SGD","symbol_name":"日兴资管新加坡股息基金 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SGD","LU1119993845.HKD":"FIDELITY ASIA PACIFIC DIVIDEND \"A\" (HKDHDG) INC","SG9999013486.USD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (USD) INC A","SG9999013460.SGD":"LionGlobal Singapore Dividend Equity Fund SGD","LU0326948709.USD":"SCHRODER ISF ASIAN TOTAL RETURN \"A\" (USD) ACC","LU2242646235.USD":"FIDELITY FUNDS GLOBAL DIVIDENDS PLUS \"A\" (USD) ACC","LU2242646821.SGD":"Fidelity Global Dividend Plus A-MINCOME(G)-SGD","LU0188438112.USD":"SCHRODER ISF ASIAN EQUITY YIELD \"A\" ACC","SG9999013478.USD":"利安新加坡股息基金","SG9999000343.SGD":"Schroder Singapore Trust A Dis SGD","SG9999006266.SGD":"MANULIFE SINGAPORE EQUITY \"A\" (SGD) ACC","BK6513":"电信服务股","LU1920063259.USD":"FIDELITY FUNDS GLOBAL DIVIDEND PLUS \"A\" (USDHDG) INC","LU2242652126.USD":"FIDELITY FUNDS GLOBAL DIVIDENDS PLUS \"A\" (USD) INC","BK6017":"非传统电信运营商","BK6516":"银行与投资服务概念","LU2401740654.USD":"FIDELITY SUSTAINABLE GLOBAL DIVIDEND PLUS \"A\" (USD) INC","LU1920062954.HKD":"FIDELITY FUNDS GLOBAL DIVIDEND PLUS \"A\" (HKDHDG) INC","LU0898667661.SGD":"JPMorgan Funds - Asia Pacific Income A (mth) SGD-H","LU0532188223.SGD":"JPMorgan Funds - ASEAN Equity A (acc) SGD","BK6523":"ESG概念","CJLU.SI":"网联宽频信托","LU0205439572.USD":"富达亚太股息基金","SG9999001135.SGD":"United ASEAN Fund SGD","LU0192582467.USD":"SCHRODER ISF ASIAN EQUITY YIELD \"A\" (USD) INC MF","SG9999016042.SGD":"Schroder Singapore Trust A Acc SGD","LU1839390173.USD":"JPM ASEAN EQUITY \"A\" (USD) INC","SG9999014492.USD":"NIKKO AM ASEAN EQUITY \"A\" (USD) ACC","SGXZ58947870.SGD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (SGDHDG) INC","IE00BKZH1Z71.USD":"BNY MELLON ASIAN INCOME \"B\" (USD) ACC","LU0441851309.USD":"JPM ASEAN EQUITY \"A\" ACC","SG9999014484.SGD":"Nikko AM ASEAN Equity Fund A SGD","BK6033":"金融交易所和数据","LU0877626530.USD":"FIDELITY ASIA PACIFIC DIVIDEND \"A\" (USD) INC MONTHLY (G)","SG9999004360.SGD":"Nikko AM Shenton Thrift Fund SGD","S68.SI":"新加坡交易所","LU0831103253.SGD":"JPMorgan Funds - Asia Pacific Income A (mth) SGD","SG9999001846.SGD":"Schroder Asian Equity Yield A Dis SGD","SGXZ27511609.SGD":"NIKKO AM SINGAPORE DIVIDEND EQUITY \"SGD\" (SGD) ACC"},"translate_title":"仅仅为了股息而永远持有一只股票可以吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"S68.SI":1.86,"CJLU.SI":1.86},"content_text":"“Is it really profitable if I don’t sell, and just hold onto a stock for decades?” \n\nMany investors ask this question, even when the stock they are holding continues to pay dividends regularly. \n\nHowever, some of the most successful investors build wealth not by frequent trading but by owning cash-generating businesses. \n\nLet us look at why holding a stock for its dividend is not only okay but is a good long-term investment strategy.\n\nWhy This Question Comes Up So Often\nInvestors tend to place a heavier focus on visible capital gains than on the quieter mechanics in long-term wealth creation. \n\nThey question whether it is really a profit if they don’t sell the stock as share price movements are immediately observable, but dividends compound gradually and attract less attention. \n\nMarket commentary typically highlights highs and corrections rather than cumulative income an investor makes over time.\n\nThis imbalance results in profits being equated with gains from selling.\n\nThe ongoing value generated by owning productive businesses attracts less attention. \n\nMany investors also struggle to distinguish between paper gains and actual cash returns.\n\nAs prices fluctuate daily, unrealised gains can feel uncertain.\n\nIn reality, investors who hold onto quality companies benefit from compounded earnings and dividend income, forming substantial long-term investment returns. \n\nDividends Are Real Returns, Not Secondary Returns\nDividends put cash directly into your pockets without any selling. \n\nThey are real returns given without any additional actions from you.\n\nSingapore Exchange Limited (SGX: S68) or NetLink NBN Trust (SGX: CJLU) serve as prime examples of dividend reliability, having sustained regular payouts throughout their entire distribution histories.. \n\nOver time, dividends will form a large portion of your total returns. \n\nWhen Holding Forever Makes Sense\nHolding indefinitely makes sense if the underlying business is genuinely high quality.\n\nSuch companies usually possess fundamental competitive advantages and consistently generate profitable cash flows regardless of the economic environment.\n\nIf cash generation is accompanied by a strong balance sheet, characterised by low debt and high liquidity, the business can weather a downturn without diluting shareholder value. \n\nLong-term holding is further justified when dividends are both sustainable and growing.\n\nPayouts funded by free cash flow, not debt, are a signal of competent management.\n\nEven modest dividend growth can compound significantly over a span of decades, and more so with reinvestment.\n\nHolding forever requires investors to view investing as ownership of the business, rather than a short-term participation in market movements. \n\nYou are no longer “renting” a stock to sell it higher later, but partnering with a company to share in its long-term success. \n\nThe Power of Dividend Compounding Over Time\nDividend compounding works by reinvesting payouts to increase the number of shares you own, raising future income.\n\nEven when the share prices stagnate, a consistently paying dividend stock can still provide significant long-term returns through compounding.\n\n\nOver the long run, many income investors see rising annual income, which reduces dependence on selling shares to realise gains. \n\nThis often leads to lower emotional stress, as day-to-day price volatility matters less. \n\nWith income growing steadily, the focus shifts from short-term price movements to long-term ownership.\n\nWhat “Forever” Really Means (And What It Doesn’t)\nHolding forever is a default position, not a blind rule.\n\nIt does not mean ignoring fundamentals.\n\nIt means holding through market cycles and reviewing business quality periodically to make sure fundamentals are still strong and sound.\n\nIf business quality deteriorates or competitive advantages weaken, selling may be the right decision. \n\nHolding forever means staying invested unless there are business fundamental issues not to. \n\nCommon Objections — And Why They Miss the Point\nHere are some common objections to holding a stock forever, and why they don’t stand:\n\n\nWhat if the price crashes?\n\nEven when prices fall, income may remain intact. \n\nThe dip could be a small market correction. \n\n\nWhat if I miss capital gains?\n\nDividends reduce reliance on “perfect” timing to exit the market, allowing compounding to work its magic. \n\n\nIsn’t it risky to never sell?\n\nRisk typically comes from frequent trading, not staying invested.  \n\nWhen You Should Consider Selling Anyway\nSelling is part of investing. \n\nIf business fundamentals permanently deteriorate and the balance sheet weakens significantly, selling would be a rational decision. \n\nWhen dividends are cut or become unsustainable, exiting may be a good strategy.\n\nAlternatively, when you discover opportunities that can deliver better long-term income elsewhere, selling can free up capital for you to reallocate resources and adjust  your portfolio. \n\nGet Smart: Dividends Build A Reliable, Long-Term Stream Of Income \nHolding a stock forever for its dividends is not being passive. \n\nIt is intentional ownership that builds a steady, sustainable stream of long-term income. \n\nFor long-term investors, holding onto quality dividend stocks can be one of the most powerful decisions in their investment strategy.  \n\nWhat are the stock secrets to Singapore’s “quiet millionaires?” Chances are, you’ll find at least one of their favourites in this free report. Download it now and see how these stocks could power your portfolio!\n\nFollow us on Facebook, Instagram and Telegram for the latest investing news and analyses!\n\nDisclosure: Wenting does not own any of the stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.36.2","shortVersion":"4.36.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2609320272","isCrawlerRequest":true}