Dividend Stocks The Investing’s Holy Grail

Investors love yield and hate risk. Why else would they still be dumping equities and chasing overvalued fixed-income investments like Treasuries, TIPS and high-yield bonds? But the one bright spot is dividend-paying stocks: As of late August, $13.6 billion of investors’ cash has flowed into dividend-stock and equity-income mutual funds this year. Higher yields than Treasurys and the prospect of share-price appreciation make dividend-paying stocks look like the holy grail of investing. Yet certain sectors, such as consumer staples, already are in “nosebleed territory,” Barron’s recently reported.

“There’s still a …… difference between what you can get in bonds and what you can get from dividend-paying stocks,” said Roger Conrad, editor of Utility Forecaster. And Mark Skousen, editor-in-chief of Forecasts & Strategies and the author or more than 25 books on economics and markets, was even more bullish. “We’re in the sweet spot for income investing — it doesn’t get better than this,” he declared, pointing out that “alternative investments — savings accounts, T-bills, long-term Treasurys [have] just awful returns.”

Source: Market Watch

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