Some ideas on the effect of dividend cuts on one's DG investing fortunes

The average DG investor appears to hold less than/equal to 50 individual equities in his/her portfolio.  From the conversations I have monitored here over the years, that seems to be the outer margin of companies that the average individual investor can keep track of.

The early phase of the investor's history is accumulation. That includes accumulation of value, but also accumulation of the portfolio team members. During that phase, most of the attention is paid to performance; earnings growth, capital appreciation, and in the case of the DG investor, rising dividends and cash flow within the portfolio. The "protect your capital" and "protect your income stream" ideas don't seem to be so prominent until one passes through the accumulation phase and into the living-on-distributions phase.

While it is true that a wage earner will not suffer a cash flow crisis as long as the next pay check is coming along, the distinction between accumulation phase and distribution phase from the standpoint of capital preservation is arbitrary. Protecting capital earlier in one's investing history actually has an outsized effect on one's security in the long run, as one is likely to be more vulnerable to discrete losses early in one's investment history. First, there's the experience thing. Second, there's the relative lack of diversification as one builds the number of positions over time. Third, there's the opportunity loss of future earnings if one makes a big mistake with assets that could have 30-40 years to compound if carefully protected.

A dividend cut is a capital killer. It is a symptom of an engine that is failing. Earnings are failing, and the company turns it's resources inwards as it attempts to repair the damage. The company may recover its valuation completely over time but that dividend is your electric bill if you're in the distribution phase.

The investor is faced with a set of challenges;  should you do nothing? should you wait and then respond to dividend cuts? Should you anticipate them and attempt to abandon/switch ownership before such an event happens? Avoiding capital losses seems to mandate the anticipate/avoid strategy.

Dividend cuts are always proceeded by something. The company management and board make a decision based on their view of the near term future. They see a threat to earnings, or they have already realized the damage and are now attempting to repair it. They need cash for something other than the dividend. The question is, can you (the owner) anticipate these events and choose to change ownership before the ship hits rough water?

What do you have at your disposal?;   You can wait for the announcement of a dividend cut. Problem is, valuation has already taken a big hit by then.

You can look for signs of impending trouble. What might these be? 
Deceleration of earnings growth
Deceleration of dividend growth
Rising payout ratio
Rising debt
rising ratio of debt to free cash flow, enterprise value or other similar ratios

Oh boy... that means monitoring.  How many data points? How often? what to do with warnings? watch list? sell? what to do with the cash?

Can you innoculate the portfolio against the kind of companies that could face a dividend cut?
credit rating? Payout ratio? Cap on dividend yield?

eyes closing, rounds and surgery on New Year's Day, must pack it in.