Why I invest in dividend stocks - Pros and Cons (updated in June 2024)

1) I don't share my portfolio due to privacy. Those who follow me long enough will know where I put my money in general. You can read more here:
My Strategy: Balance your Risk and Means in Investment ⚖️
2) I also shared a few important dates to take note in June which could cause volatility risk or opportunity:
6 Jun Nio earnings, SpaceX Starship 4 Launch (related to Tesla), US jobless claim
7 Jun Nvidia 10 for 1 stock split, US employment report
11-12 Jun Fed FOMC meeting 
13 June Tesla shareholders meeting
28 Jun Geely Auto earnings
2/3* Jul Tesla Q2 delivery report
3) In this post, I will explain why I invest in dividend stocks and the risks behind them. The main reason is for stable passive income and to diversify my portfolio. Some also said dividend stocks are meant for retired investors who have a short time horizon and want stable income. I would like to highlight some risks and clarify misconceptions about dividend stocks:
a) Dividend payout may not reflect company financial health. Although the financial report said the dividend comes from profit, we should also question where the company reinvest their extra cash. There are some companies like Alphabet, Meta and Amazon don't pay dividends but the earnings are still healthy.
b) Dividend is not guaranteed. The income may look stable but at extreme macroeconomics conditions like the COVID-19 pandemic, dividend payout may be cut or stopped. The more important data I usually look at is the dividend growth of the company.
c) Dividend stocks are subjected to volatility risk. The usual comment I heard is share price plummet after dividend payout out. The drop in stock value may be higher than the income earned from the dividend depending on when you bought the stock.
d) I prefer to invest in dividend stocks at the Singapore stock market over the US because investors are subjected to a 30% U.S. dividend withholding tax on all dividends received from U.S. listed equities.
My Take: Despite the risk, I still invest in dividend stocks to diversify my portfolio. My advice is not to invest in a stock purely on dividend; you should also check if the company is worth investing. If the share price falls after the dividend payout, you should not panic sell. In another words, you should have an exit plan for the stock.

Source:
Is Dividend Investing a Good Strategy? - Investopedia