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
-
There are some dividend aristocrats which have not only maintained but increased their dividends for over half a century. Having survived ev...
-
If you want to earn more dividend income from the stock market, then you need to start investing in healthcare. Analysts project the number ...
-
Showing resilience during a tough week was a group of stocks that has not been heard from much in the past two years. A group that has been ...
-
High dividend yields are harder to find lately, given the long-running stock market rally. But that scarcity doesn't mean investors have...
-
One little-known tax loophole allows Americans to collect large, growing distribution checks from the government. And investors can begin ea...
-
Every investor needs a security blanket -- that piece of the portfolio that needs no attention and doesn't keep you up at night. Busines...
-
The U.S. boosted tariffs on $200 billion worth of Chinese goods from 10% to 25%. The markets had expected this to be the week that this deal...
-
I love buying dollar bills for $0.80. Of course, you don’t find many chances like that in the stock market. Whenever such a great deal arise...
-
Technology is the alchemy of the stock market. It is where companies turn worthless silicon into incredible new and expensive gizmos and dev...
-
The one knock against this midstream company is its higher risk profile compared with its peers. It has been working to address that issue b...
0 comments
Post a Comment
Post a Comment