Should I invest $100k in dividend stocks like Microsoft for growth and yield?

A Reddit user is trying to figure out what his investment strategy should be.

He is interested in an investment that provides him with a solid potential for growth, and he also wants to find an investment that will pay him dividends, so he has considered buying Microsoft for both yield and growth. Specifically, he is thinking about investing $100K into the stock.

So, is that a smart decision for the Redditor, or should he make a different investing choice? 

How to decide on your asset allocation and pick investments that make sense for you

In response to the question asked by the original poster (OP), many Redditors gave alternative suggestions of different stocks or funds that they felt he should buy that could provide a higher dividend payout.  

A good number of Redditors also had some other important points to make, though. Specifically, many posters:

• Urged the OP to be careful about who he took financial advice from, as the OP said his interest in this investing plan came from his bank advisor. One poster warned the OP that when these kinds of advisors make recommendations, they are often doing so on the basis of the fact that they get a kickback from the products they are suggesting. 
• Suggested finding an ETF that would provide a good dividend payout, because ETFs expose you to less risk than buying individual companies. Those who suggested purchasing an ETF advised the OP to be careful on the fees that the fund is charging, as you want to make sure to keep your expense ratio as low as possible so you don’t lose a good portion of your returns to fees. 
• Recommended comparing yields with risk levels. You don’t want to just focus on what dividend an investment is paying — you also need to think about the level of risk that you are taking on. This is particularly important as you get older and you begin to near retirement age, when you may not have as much time to recover from investing mistakes, and you may need to start withdrawing from your account and won’t be able to wait for a market recovery if a crash happens at a bad time.
• Advised selecting an investment strategy that would allow the OP to buy and hold stocks for the long term, which has proven to be a more successful strategy than buying stocks to chase short-term profits.

All of these pieces of advice are good advice that the OP should consider carefully before making any kind of investment decision.

Getting help with your investments can be a smart choice

Since the OP is turning to the Internet for investing advice, it’s clear that he is not fully confident in the decisions that he is making. Because of that, buying individual stocks may not be the right way to go because you need a good amount of investing knowledge to decide how to build a diversified portfolio that exposes you to the right risk level when you are buying shares of individual companies.

Ultimately, the OP’s best bet may be to talk with a financial advisor. An advisor can provide him with investing advice that takes the big picture into account, and can help him put together a comprehensive plan that will maximize his chances of accomplishing his financial objectives.

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