Dividends4Life: Investors Flock to Dividend Stocks

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Investors Flock to Dividend Stocks

Posted by D4L | Tuesday, January 03, 2012 | | 0 comments »

During the stock market’s go-go years of the 1990s, investors turned their backs on dividend stocks. But now the tide has turned, and people are snapping up those shares. The 100 stocks in the Standard & Poor's 500 Index with the highest dividend yields have gained 3.7 percent on average so far this year before dividend payouts, according to Birinyi Associates, The Wall Street Journal reports. Meanwhile, the 100 lowest-yielding stocks have dipped 10 percent.

Record low interest rates also make dividend stocks attractive as an alternative to bonds. With the 10-year Treasury note yielding less than 2.0 percent, investors have a bevy of choices among blue-chip stocks with yields above that level and the potential to rise in value. In deciding on dividend stocks, experts recommend looking for yields of 3 to 6 percent. A lower yield isn’t worth the risk, and a higher yield may be danger of being cut.

Source: Newsmax.com

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