Dividends4Life: Dividend Stocks Beat TIPS For Income Investing

Dividend Stocks Beat TIPS For Income Investing

Posted by D4L | Saturday, March 10, 2012 | | 0 comments »

Dividend-paying stocks aren’t for widows and orphans anymore, and, for that matter, neither are Treasury bonds. As income-seeking investors know all too well, generating meaningful yield nowadays means accepting greater market risk and volatility. Investing for income has become so challenging, it may be creating more widows and orphans than it saves. Buyers nowadays face a Hobson’s Choice that forces them to hold their noses and plunge.

Yet one income strategy is capturing the attention of investors and investment advisers alike: Swapping inflation-protected Treasurys, or TIPS, for dividend stocks yielding 3% or more. Dividend stocks provide income, but they’re stocks all the same. In the 2008 market meltdown, SPDR S&P Dividend, an exchange-traded fund made up of top-drawer dividend stocks, lost 23% while the benchmark Standard & Poor’s 500-stock index fell 37%. So if you pursue this strategy, your portfolio will become more volatile, and you’ll have to be proactive about risk management.

Source: Market Watch

Related Articles:
- We Were Dividends, Before Dividends Were Cool
- 12 Dividend Stocks Delivering The Secret To Success
- 12 Dividend Stocks For A Rainy Day
- 9 High-Yield Managed Distribution Policy Funds
- The Elite Dividend Stocks List

Click here to have future posts delivered to you for free!



Post a Comment

Note: Only a member of this blog may post a comment.


Popular Posts Last 30 Days