Dividend Stocks Popular As Fed Hurts Savers

If you are a responsible saver, the Federal Reserve isn't doing any you favors. The Fed unsurprisingly left a key short-term rate near 0% Tuesday, meaning that rates on money-market accounts, CDs and other savings products are likely to remain as anemic as they've been for the past two years.What's an income-hungry investor to do then? Stocks that pay healthy dividends may now be a better way to chase yield.

"You have to get creative. Bonds and CDs are not earning you much so dividend payers are a nice way to get you some income," said Andrew Fitzpatrick, director of investments with Hinsdale Associates, a money manager in Hinsdale, Ill. "But you have to be careful because there are still a lot more risks with stocks over bonds." What's more, companies that pay rich dividends have begun to outperform the broader market lately.

Source: CNN Money

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