Some advisers, brokers and investment writers are saying the conditions are ripe for a rotation out of dividend stocks, the argument being that the anticipated rise in interest rates is making the landscape dangerous for the time being. When rates were close to zero, bonds paid almost nothing, while dividend stocks enjoyed a run-up in the market and better yields. There are sound arguments for considering reallocating your portfolio, including this one from Lighthouse Capital LLC founder Aaron Katsman, but the decision needs to be based on your investment objectives, not only on market timing.
All things being equal, the price of an income-producing investment goes down as interest rates rise. That is especially true for bonds, since market prices must automatically adjust so that existing bonds’ yields will match the coupon rates of newly issued bonds. But this may not matter if you are holding individual bonds bought at face value (or par value) or below, because you won’t realize any losses if you hold the bonds to maturity. However, if you are holding shares of bond mutual funds or exchange traded funds, you may not be able to avoid losses.
Source: Market Watch
Related Articles:
- 3 Styles Of Successful Dividend Investing
- 8 Higher-Yielding Financial Services Stocks With Rising Dividends
- 5 Quality Dividend Stocks To Take The Emotion Out Of Investing
- 7 Select High-Yield S&P 500 Dividend Stocks
- A Winning Investment Strategy
Time To Sell Your Dividend Stocks? Not So Fast
Posted by D4L | Saturday, April 26, 2014 | ArticleLinks | 0 comments »________________________________________________________________
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.