You Should Buy Stocks That Pay Dividends

With yields low and prices high, it's time to rethink bonds as your safe bet, experts say. No one can time the Fed's decision, but one move you might make in preparation is to shift part of your bond portfolio into dividend-paying stocks. While stocks are inherently riskier than bonds, these shares are generally less volatile than other types of stocks and in many cases offer income-hungry investors attractive yields relative to bonds. They tend to do well in a rising rate environment, which is usually a sign that the economy is picking up.

When the economic picture improves, companies generally raise their dividend payouts slowly over time, says Howard Silverblatt, senior index analyst at Standard & Poor's. "Overall, you're looking at a positive scenario." The number of companies raising their dividend was up 57 percent during the third quarter over the same period last year, according to S&P.

Source: U.S. News & World Report

Related Articles:

• 10 Stocks With Sustainable Dividend Growth
• We Were Dividends, Before Dividends Were Cool
• Rev-up Your Portfolio With Asset Allocation
• Fishing in the Bathtub
• 10 Dividend Stocks Delivering A Quick Payback