Don't Count Out Dividend Stocks Just Yet

We have recently experienced a nasty market pullback, which has been focused on dividend stocks. The theory is that higher interest rates will make stocks less attractive presumably because investors will demand higher yields and the most immediate way for a security to produce a higher yield is by lowering the price. Of course, in the short run, anything can happen to a particular stock's price and to the averages in general. The thesis of this article is that most equity yield strategies remain attractive and that the "dividend stock" group of equities is particularly attractive.

There are always clouds on the horizon. A smart sailor learns how to read them. It is, of course, possible that the Fed will raise rates before the economy improves and that would certainly be a negative for the market. We could also dip into a deflationary recession. A major bubble could be about to burst. And do investors really believe that we are about to experience something worse than the 2008-09 debacle (during which none of these companies cut dividends and all but one increased them)?

Source: Seeking Alpha

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