Recently, high dividend stocks have once again stood before most retail investors.

The CSI Dividend ETF has even set a historical high, becoming the most attractive in the market.

In February 2021, the Shanghai Composite Index began to adjust.

The maximum drop in the Shanghai and Shenzhen 300 index exceeded 47%, but the CSI Dividend ETF has risen by 55% over the past three years.

What a painful realization!

The direction of high dividends can be said to be a bull market, without looking back.

The largest drawdown occurred in September and October 2022, with a drawdown range of about 14%.

At other times, it is basically a smooth road, and occasional declines can be quickly made up.

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The market has defined a new concept for the direction of high dividends, called "Dividend Four Knights".

The first knight, banks.The banks referred to here are mainly the four major banks: ICBC, Agricultural Bank of China, China Construction Bank, and Bank of China.

These four major banks have maintained high dividends for many years.

Taking the Agricultural Bank of China as an example, with a share price of 4 yuan, the dividend exceeds 0.2 yuan, and the dividend yield has been maintained at over 5% for a long time.

At the extreme low point of the stock price, the dividend yield soars to over 7%.

The performance of the banks needs no further explanation. Although there is no growth, it is also extremely stable.

The second swordsman, coal.

Shaanxi Coal Industry, Shanxi Coking Coal International, and China Shenhua.

The recent three-year trend of the coal magnates can be described as advancing triumphantly, so much so that the market calls it "black gold."

The daily dividend yield is very high.

Taking the coal leader China Shenhua as an example, for several consecutive years, the dividend has been more than 20 yuan for every 10 shares, with a dividend yield exceeding 5%.The Third Musketeer, Electricity.

The most representative power stock, needless to say, is Changjiang Electric Power.

This industry is exceptionally stable, and the stock prices are also very steady, with dividends being as consistent as always.

We have only heard of power shortages, and have heard that electricity prices are going to rise, it can be said to be an industry that is safe from both drought and flood.

The Fourth Musketeer, Petroleum.

Sinopec, PetroChina, and CNOOC, are the three musketeers of petroleum.

The three musketeers are not only performing well in the past two years, with good dividends, but more importantly, the stock prices have soared.

If we say that banks, coal, and electricity are steadily rising,

Petroleum is a significant increase.

PetroChina, in the past three years and more, has more than tripled, which can be said to be the return of the king.The "Dividend Four Musketeers" not only offer stable dividends, but also see a steady rise in their stock prices, directly driving the trend of the CSI Dividend Index.

This stable investment style has also become a hot item in the market for a while.

Originally, retail investors were quite indifferent to this direction.

But in the face of ironclad facts, retail investors have also started to lay out these high dividend stocks that were originally unremarkable.

Now, at the current position, is it risky to invest in the direction of high dividends?

Answer: The risk is not small.

Whether to invest in the direction of high dividends depends on whether you want the stock price to rise, or simply just want the dividends.

If you simply look at the dividends and do not care about the fluctuations in the stock price.

Then, under the condition that these sectors have not experienced significant performance fluctuations, the dividend rate can be relatively guaranteed, that is, the potential return rate will not be too different, and the risk is not significant.But if you still expect the high dividend direction to achieve excess returns, with dividends as a premise and stock prices rising, then the risk is not small.

The main reasons are as follows:

1. Stock prices and dividends are different systems.

The market value of a stock is one thing, and dividends are another.

There is no necessary relationship between the high or low stock price and dividends; they are not part of the same system.

In fact, the speculation in stocks does not look at dividends; this is the stark reality.

The market will not hype stocks just because they have high dividends.

Many high dividends are only apparent after the stock has fallen a lot, making the dividend rate seem high.

Whether the dividend is high or not is just an excuse; the rise and fall of stock prices are still related to the market. When funds need to avoid risks, they will buy in this direction.

When the market has good opportunities, high dividends are naturally abandoned by the market. This is a seesaw.So, dividends are determined by the listed company, while stock prices are determined by the market; there is no necessary connection between the two.

The decline in stock prices brought by the market will not reduce your dividends.

And the amount of your dividends also cannot determine the rise and fall of the stock price.

2. The attractiveness of the dividend yield is no longer high.

As stock prices continue to rise, the dividend yield will actually decline gradually.

When the stock price was 5 yuan, the dividend yield was 5%; when it rose to 8 yuan, the dividend yield was reduced to only 3.125%.

In the absence of a significant increase in the performance of listed companies, the dividend yield of high dividend direction has actually declined.

However, the market's funds still pursue the current dividend yield of around 4%.

But if this direction, the stock price continues to rise, and the dividend yield decreases further, whether it is attractive or not is uncertain.

When the market falls enough and presents a good investment opportunity, the dividend yield is also not worth mentioning.Because you can gain 5% in a single day, why wait for a year's dividend?

As the dividend rate decreases and the stock price rises, this situation will not last long and will definitely lead to a divergence of funds.

3. The performance growth of listed companies is slow.

The performance of listed companies has not been very good in the past two years.

It's not that the performance will definitely decline, but the growth rate is very low.

High dividend-paying listed companies are often large-cap enterprises, and in the case of unsatisfactory performance growth, dividends will not increase significantly.

When the dividend expectations are visible, the relationship between stock price fluctuations and dividends becomes very small.

The true value of high dividend stocks lies in the listed companies becoming bigger and bigger, with net profits increasing, and dividends naturally becoming more.

The dividend yield is calculated based on the stock price and market value, but for investors who buy and hold for a long time, the total amount of dividends is the main issue to be concerned about.

4. There are large funds that need to enter the market at a low position for layout.The last point, which is actually very crucial, is that there is capital that wants to enter at a low position for layout.

As for what kind of capital it is, everyone knows it in their hearts.

At a historical high point, these funds definitely will not enter.

After all, they are not the ones to take over the market, and there is no need to enter the market at this point to do more and support others.

Moreover, from a long-term perspective, the essence of high dividends is that the price is low enough, and the dividend rate will be high enough.

At this historical high, there is a 20-30% pullback, which raises the dividend rate by 20-30%, which will have a better attraction and also gives these funds a chance to layout.

In fact, the fourth point is very crucial and is the core of the problem.

After the high dividend direction is raised, the difficulty of layout for the subsequent large capital entering is very high.

Funds are very smart, and when they are avoiding risks, they will enter the high dividend direction in the short term.

But when the market has opportunities, no one can look at a 4-5% dividend.Moreover, if the market value declines, the annual dividend cannot make up for the floating loss at all.

A high dividend is a false proposition, the premise is that when you buy, the price must be low enough to make the dividend rate high enough.

Therefore, as the dividend rate gradually shrinks, the risk of retail investors laying out in the direction of high dividends is gradually increasing.

Buying high dividends = buying financial management, which seems to be established, but in fact, it is also a false proposition.