I'm a reformed dividend investor. I was attracted to dividend investing circa 2004, for the same reason Mike talks about in his good pitch. I found the Morningstar Dividend Investor newsletter when it first started. Josh Peters, the original author was a really smart guy, who's not only a gifted stock picker, but was an excellent explainer about why. His book, while horribly out of date, is still worth reading if you want to do dividend investing By closing following his newslesster, my portfolio was consistently beating the appropriate indexes by 1-2%. According to Schwab's portfolio, I was even getting higher returns with lower risk, terrific for those Seeking Alpha.
I entered 2008, with around 3 dozen dividend-paying stocks with a dividend yield of just under 4%. Perfect for a 3.5% withdrawal rate. The big problem was that the portfolio was overweight in financial stocks, especially banks. Not only did the bank stocks valued plummet, but all of them slashed their dividend and many eliminated them entirely. However, overall the portfolio performed as expected, stable value stocks, with Beta <1, and high dividend yields fell less than the S&P 500. More worrying was the dividend cuts, Josh had explained that dividend cuts were quite rare. It turned out 2009, was a record year for dividend cuts, surpassing cuts in the great depression. Not just bank stock but dividend aristocrats, like GE slashed dividends also. So while my dividend income was only slashed by about 25%, far less than the S&P 45% drop. It still resulted in my dividend income being a bit below my withdrawal rate. Since, the whole idea of dividend investing while in retirement is you have enough income so you don't have to sell in bear market, that's a bad outcome.
I stopped doing dividend investing around 2015, for a couple of reasons. First of all, it became too hard, Josh Peters got lured away to run a hedge/mutual fund (I'm sure he got hefty raise). His replacement was not nearly as good. I looked at other income-oriented newsletters, and there wasn't a lot of variety. By and large, you can just buy all the stocks the Vanguard Wellesley fund, throw in a few MLP (master limited partnerships mostly oil pipelines as such) and you too can write a dividend newsletter.
But most importantly, dividend investing sucks in bull market. Up until around 2010-2012, you could make a case that dividend investing had similar returns to index investing with lower volatility. Thanks to the dramatic increase in the price of growth stock (e.g FAANG) that's no longer true.
I just checked the Morningstar Dividend Newsletter home page. From 2005 to 12/31/2021 the dividend investor has a total return of 327%, not bad. But nowhere near as good as the 466% of the S&P. Considering when I stopped subscribing, it was still beating the S&P 500, the last seven or so years must have been really bad.