Dividend Stocks as Bond Substitutes

I retired back in 2000, just as the tech bubble was bursting. My company had prepared the prospective retirees through seminars and I knew just what to do - roll the 401k money into an IRA with 30% bonds and 70% stock funds. I proceeded to do that, but someone forgot to tell the market how this was supposed to work. Thank goodness for the small pension that got me through the first year.

With bond yields on the 30 year bond hovering at 4% yield, I'm looking for an income substitute to replace bonds. I have had dividend growth stocks in my portfolio since 1980, starting with PG. Then I added AT&T (T), Verizon (VZ), Century Link (CTL) and Dominion (D). Finally, in 1996, I invested in health care stocks Johnson & Johnson (JNJ), Abbott (ABT), and others. I believe strong dividend growth stocks with 4% minimum yield will provide my income needs for the next decade.

Source: Seeking Alpha

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