SMJ, you are correct, it isn't simple.
It takes some level of research.
However, NOKIA seems an extreme case and is certainly not typical.
It isn't just when the stock turns south, you have to take a good look at the foundation of the company and its product. The complete lack of an answer to the smart phone trend was a significant part of their woes.
This has been years in the making, and I am not sure when I would have sold my shares, if I had owned any.
Your post though just brings me back to the need to investigate any investment. Such investigation will lower the odds of taking a hit like this, but never completely eliminate it.
That brings us to the need to diversify, which is necessary in almost any good investment strategy.
Sure, it happens. I took a hit to my income stream from dividends in the past. It has never been very large, I had always had enough funds to cover the loss, and over 7 years, my dividend income stream has not only recovered, it is growing much faster than inflation.
Dividend investing is a relatively stable, lower risk, method of income generation as long as you do your research.