 I am a big fan of companies that make it a regular habit of dialing up a dividend. This is why I have been such a proponent of the dividend aristocrat group. Nothing perturbs me more though than to buy into a 2% dividend stock that I believe will crank up its rate only to be forced to wait multiple years before seeing that increase. To counteract this here is a simple parachute that can increase your confidence that a rate will increase.
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 In our continuing series on dividend cuts and how to avoid them, today we are going to look at what the effects that market and sector pressures have on making company’s cut dividends, and how you can train yourself to see them coming.
As we discussed previously dividend cuts can beat up your portfolio so they should be avoided at all cost. By exploring some of the main reasons that cuts happen perhaps we will better understand why they happen and how to purge these stocks before the bad news hits.
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 Dividend rate cuts are painful and can send your portfolio into a tailspin. Why do they happen and can we see them coming? In our continuing series on dividend rate cuts we are going to look at stale dividends with these questions in mind.
Stale dividend rates/ earnings
Dividend rates are set by companies with an expectation around the future growth of the company. As the company’s profits increase so too should the dividend rate. When you find a company where the dividend has remained fix for an extended period what you have is a stale dividend.
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Over the last six months we have witnessed a staggering number of dividend cuts. To Graham style investors, or pure dividend investors this has come as upsetting news- especially to those who didn’t see it coming. A dividend cut can instantly impact the stock price of a company in addition to your ROI. Why do dividend cuts happen, and how can we learn to see them coming? In the following short series we will introduce some of the main reasons why dividend cuts happen and how you can learn to anticipate them. Our first topic is the most common reason for dividend cuts so lets get into it.
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