Dividends4Life: Are Dividend Stocks Safer Than Bonds?

Are Dividend Stocks Safer Than Bonds?

Posted by D4L | Wednesday, February 01, 2012 | | 0 comments »

Marc Faber, writer of the Gloom, Boom & Doom Report, recently challenged the traditional notion that government bonds are safer than stocks in an interview on Bloomberg TV: The [Swiss] 10-year government bond yield is 0.7% and you can buy quality companies and they have a dividend yield of maybe 3%. Relative to government bonds, equities are attractive.

If you really think it through and you are bearish as I am and you think the whole financial system will one day collapse, maybe three years or five years or 10 years, one day there'll be a reset and everything will be essentially started anew. Then you are better off in equities than in government bonds because a lot of government bonds will either default or they will have to print so much money that the purchasing power of money will depreciate very rapidly. And while U.S. 10-year Treasury bonds yield roughly 2%, investors can still find plenty of stocks yielding higher dividends right up to (and through) any apocalypse.

Source: Motley Fool

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