High-Yield Dividend Stocks to Avoid\n\nDividend stocks are often seen as a safe and reliable investment option, providing steady payouts and potential for long-term returns. Not all dividend stocks are created equal. Some may be at risk of reducing or suspending their payouts, while others may have downside risks that outweigh their high yields. \n\nOne category of dividend stocks to avoid is known as dividend traps or yield traps. These are stocks that offer high dividend yields, but are at high risk of cutting their payouts. The market has priced these stocks accordingly, giving them double-digit yields that may seem enticing, but come with a caveat. \n\nIn fact, it’s another dividend stock to avoid for the same reasons as ACP. AEF’s portfolio is full of low-rated debt securities. As such, the value of its holdings could be negatively impacted by rising rates and defaults. Additionally, AEF’s portfolio is full of emerging market stocks. While these markets are growing faster than the U.S., they are also more volatile. This could lead to a decline in the value of AEF’s holdings, and a subsequent dividend cut. AEF earns an F rating in Portfolio Grader.\n\nAnother dividend stock to avoid is Adeia (ADEA), a company that licenses intellectual property. While its forward dividend yield may seem low at 1.89%, there are other factors to consider. Sell-side analysts anticipate a significant decline in the company’s earnings this year, which could put its current rate of payout at risk. Additionally, Adeia’s plan to grow and maximize the value of its patent portfolio may prove to be difficult to achieve. As such, investors should be cautious when considering ADEA as an investment option.\n\nOne such example is the Abrdn Income Credit Strategies Fund (ACP). This closed-end fund (CEF) has a high forward dividend yield of 14.35%, which may seem attractive to dividend-focused investors. The market has not made a mistake in de-rating ACP to such a high yield. The fund has seen a decline of over 20% in the past year, and may continue to face challenges in the future. The prospect of the Fed raising interest rates and the current economic downturn could lead to further declines and potentially another dividend cut.\n\nThe Abrdn Emerging Markets Equity Income Fund (AEF) is another CEF that should be avoided. While its forward yield of 6.6% may seem lower than ACP’s, it still carries significant risks. AEF’s portfolio is full of low-rated debt securities, which could be negatively impacted by rising interest rates and defaults. Additionally, its holdings in emerging market stocks make it more volatile and could lead to a decline in its value and subsequent dividend cut..”