After a raucous autumn and a tumultuous election season, many investors are looking to get off the roller-coaster of timing stock prices and looking to play it a little safer by investing in dividend stocks instead. While this is typically a solid way to boost your passive income and get a nice quarterly payout in your portfolio, 2017 could bring some unwanted bumps in the road for dividend stocks. For starters, several indicators point to a rise in interest rates in the coming year.
The Federal Reserve is expected to incrementally raise interest rates, which historically makes bonds more appealing than stocks for investors, and dividend stocks can take a nosedive during periods of bond growth. Also, many economists are forecasting a rise in inflation, another reason to choose dividend stocks very carefully. Weak ones should be avoided. Two dividend stocks in particular provide good examples of dividend stocks that look great on the surface but are too risky underneath the shine to hang on to in 2017: Abercrombie & Fitch (NYSE:ANF) and Windstream Holdings (NASDAQ:WIN).
Source: Guru Focus
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