Suddenly, boring is beautiful in the stock market. As investors lick their wounds from early-year troubles and search for some stability in their portfolios, they are dumping shares in fast-expanding industries such as technology and turning to companies paying hefty dividends. It is the latest sign of changing times in the markets, with income-generating investments suddenly warranting a premium, in contrast with the trend that held from 2009 to last year, when dividend stocks lagged behind a broad market rally.
Part of the reason dividend payers are in heavy demand: Investors have decided a series of interest-rate increases this year by the Federal Reserve now appear less likely than a few months ago, thanks to declining global-growth prospects and the adoption of negative interest rates in Japan, in which the central bank charges lenders to hold deposits. Those shifts tend to make the dividends these companies pay more attractive. "What better value enhancer for dividend yielders than the threat of the fixed-income market going to negative yields?" said James Paulsen, chief investment officer at Wells Capital Management, which oversees $348 billion.
Source: NASDAQ
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