The current low-interest-rate environment has caused many investors to search for sources of incremental yield. Two of the more popular approaches involve dividends: stocks with high dividends (or higher yields than available from safe fixed income investments) and stocks with fast-growing dividends. We will examine two of these alternatives to see if they're good choices.
To represent high-dividend stocks, we'll use the SPDR S&P Dividend ETF (SDY). To represent fast-growing-dividend stocks, we'll use the Vanguard Dividend Appreciation ETF (VIG). Although the dividends from these two strategies may provide higher yields than bonds in this current environment, keep in mind what would likely happen if the market heads south again. Not only would the value of the stocks drop, but the companies may choose to trim or even eliminate their dividends. Certainly, that's what we saw in 2008, as SDY's net asset value dropped 23 percent and VIG's NAV fell 26 percent.
Source: CBS News
Related Articles:
- Are Storm Clouds Gathering For These 7 High-Yielding Dividend Stocks?
- Bonds Look Morbid When Compared To These Dividend Stocks
- 7 Higher-Yielding, Low Debt Stocks With A Tiny Payout Ratio
- The 2012 Dividend Aristocrats
- 7 High-Yielding Mega-Cap Stocks
________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
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...
-
We screened our 24/7 Wall St. dividend equity research database and found 5 stocks that combined can generate over $3,000 of annual passive ...
-
The stock market has been on an upward path of late, with some of the most prominent stocks hitting astronomical highs. The dividend yield o...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
Dividend growth stocks can be incredibly attractive investments if you crave recurring income. As these types of stocks raise their dividend...
-
In my opinion, there are three criteria investors should consider when evaluating a particular stock for their portfolio. The first is histo...
-
In this article, we discuss 5 best March dividend stocks to buy. If you want to read our detailed analysis of dividend capture strategy and ...
-
As the broader stock rally broadens to some of the more “boring” corners of the market, it’s the higher-yielding dividend plays that could s...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.