For many investors who crave steady income, bonds don't look as good as they used to. With U.S. Treasury yields languishing near historic lows, some people believe they've found a great alternative: dividend-paying stocks or dividend-focused mutual funds. Many investment pros say it can be a reasonable move for at least part of an income-oriented portfolio. But they caution that investors need to understand the risks.
The most basic concern: Equities don't behave the way bonds do, and investors face a much greater chance of capital losses with stocks and stock funds. "People may not appreciate that moving from bonds to stocks is a major change in asset allocation," says Joseph Davis, chief economist and principal at Vanguard Group. Investors should also remember that dividend-paying stocks don't always behave like other stocks, either. Dividend payers are often larger, established companies—which means they often aren't perceived to have the same potential for earnings and revenue growth as smaller firms.
Source: Wall Street Journal
Related Articles:
- 10 Higher Yield Dividend Stocks
- Who Owns The Top Dividend Stocks?
- Top 10 Articles For 2010
- Dividend Stocks vs. a Safe Distribution Rate
- Best Stocks for 2011
Dividend Stocks Aren't the New Bonds
Posted by D4L | Sunday, February 12, 2012 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
In short, dividend-bearing stocks are one of the smartest approaches stock investors have available currently. The same is true in strong ec...
-
Finding cheap dividend stocks is critical for another reason. By the time the Federal Reserve meets for the second time in 2023, the central...
-
Investing in passive income can allow you to make money with minimal portfolio management. There are many types of investments to make passi...
-
Many companies make very predictable fixed dividend payments each quarter. When they do, their investors have a pretty good idea of how much...
-
As 2022 wraps up, many investors are likely looking for ways to position their portfolio for more macroeconomic uncertainty next year. After...
-
If your growth-investing days are over (or nearly so) and you're more interested in steady income, start your search with all-weather st...
-
Dividends drive significant returns for Berkshire Hathaway's portfolio. One common theme of Warren Buffett's Berkshire Hathaway is d...
-
With inflation appearing to have peaked and fears of a recession dimming somewhat, investors have some positive catalysts to look forward to...
-
Dividends can be an underrated source of income for investors. With so much volatility in the stock market right now, it can be comforting t...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.