Dividends4Life: Dividend Stocks: Your Safest Investment

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Dividend Stocks: Your Safest Investment

Posted by D4L | Tuesday, June 28, 2011 | | 0 comments »

Six straight weeks of stock declines has shaved about 6% off the top in major market averages in April. That hasn’t been good for income investors holding high-yield equity securities, but it has been for Treasury bond holders. In fact, the flight to quality in Treasury bonds has caused the price of long-term Treasuries to soar. Over the past six weeks, long-term Treasury bonds, as represented by the iShares Barclay’s 20+ Year Treasury Bond ETF (NYSE: TLT) have climbed about 4%.

By comparison, dividend-paying equities such as the ones found in the iShares Dow Jones Select Dividend Index (NYSE: DVY), are down about 1.7%. The relative performance of DVY versus broader indices such as the S&P 500, which is down about 4.6% over the past six weeks, shows that dividend stocks are actually holding up a lot better than the overall market. Still, the recent decline in dividend stocks can’t compare to Treasury bond ownership during this downturn.

Source: InvestorPlace

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