Why Conservative Investors Should Not Short Stocks

Although I generally limit my writing to companies I like and I choose to focus on ways to make money with them, I have occasionally commented on businesses that do not seem likely to be profitable many years from now or companies that have such a high valuation that either a significant fall in stock price is inevitable or it will take many years of growth before the stock price can advance from such a lofty base—with Amazon being a prime example.

Usually, when I mention something like that, I receive the question, “Well, if you don’t like Stock X, why don’t you short it?”

As far as I am concerned, shorting a stock is the exact opposite of dividend investing in a way that benefits get transformed into obligations. For most of 2014, Altria paid out a $0.48 quarterly dividend. If you become a part owner and intend to … Read the rest of this article!