Dividends4Life: The Best Dips to Buy Now

The Best Dips to Buy Now

Posted by D4L | Sunday, June 23, 2013 | | 0 comments »

May 22 was not a kind day for income investors. This was the day income investors collectively realized the Federal Reserve’s “QE Infinity” really wouldn’t go on … well, for infinity. Fears that market yields would rise became a self-fulfilling prophecy. The 10-year Treasury yield, which had reached a new low just above 1.6% in late April, had started to creep upward in early May. On May 22, it shot above 2%. Income-focused investments got absolutely clobbered as a result.

For income investors to remain interested, these stocks need to provide not only a competitive current income stream, but one that will grow to keep pace with inflation. Most equity REITs and MLPs meet this requirement easily. With the U.S. property markets continuing to heal, equity REITs should enjoy several years of improving occupancy and higher rents, not to mention appreciating property values. All of this bodes well for higher REIT prices and dividends. I also see value in “non-traditional” dividend stocks, such as old-guard tech giants Microsoft (MSFT), Intel (INTC) and Cisco Systems (CSCO). All have been aggressively growing their dividends in recent years, and all healthily yield more than the 10-year Treasury will any time soon.

Source: InvestorPlace

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