In the 0% interest-rate world of Ben Bernanke, the 3% dividend yield is king. When a two-year Treasury note yields 0.22% and a two-year CD pays 0.85%, it's not surprising that savers and investors are eager to snap up anything with a higher yield. That's got an upside—stocks that pay 3% or more have shown big gains in price as dividend-hungry investors have bought the shares. Intel (INTC), for example, which paid a 3% dividend at the end of 2010, returned 19.03% in 2011 (combining price appreciation and dividends.)
At its January 25 meeting, the Federal Reserve's Open Market Committee said it would keep short-term interest rates at their current exceptionally low levels—I guess 0% counts as exceptionally low—until the end of 2014. That's a big extension of the Fed's previous guidance for interest rates at this level until mid-2013. That's not a problem for investors who already own shares. They locked in their yields when they bought. But it is a problem for investors with new money, as yesterday's high-dividend stock turns into tomorrow's stock with a mediocre yield.
Source: Money Show
Related Articles:
- 15 Dividend Stocks With A 15% Yield In 15 Years
- Why Dividend Stocks Are Evil
- Don't Touch These 5 Dividend Stocks!
- 3 Dividend Stocks That I Will NEVER Lose Money On
- List of 195 Dividend Stocks Every Income Investor Should Know About
Stocks for the Dividend Craze
Posted by D4L | Thursday, February 09, 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...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
The best dividend stocks have one thing in common: resiliency. They can continue increasing their dividends even in the harshest economic en...
-
A good dividend stock has more than a high yield. Dividends need to be supported by cash flow, and cash flow depends on the long-term streng...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
When looking for dividend stocks to invest in, it is advisable to choose companies that have strong dividend histories and stable balance sh...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
When hunting for discounted investments, one excellent starting point is to look for businesses with dividend yields trading above their fiv...
-
Strange but true: seniors fear death less than running out of money in retirement. And unfortunately, even retirees who have built a nest eg...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.