The Financial Services Sector includes insurance companies, banks, brokerages, mutual funds and other similar companies. Before the 2008-09 financial services meltdown, these stocks were the cornerstone on many income portfolios. The companies were flush with cash, the stocks provided relatively high yields, good dividend growth rates and carried very little perceived risk.
Unfortunately, things are not always as they seem. Under the surface banks were making questionable loans, while investment firms were creating and peddling exotic financial instruments. In effect, their CEO's were building houses of cards in a hurricane - it was destined to come tumbling down, and it did. As a result, investors learned some very valuable, but expensive lessons. This should serve as a warning when investing in the Financial Services Sector - not a stop sign. Many of these companies are now in very lucrative positions.
Source: Dividend Growth Stocks
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Posted by D4L | Thursday, July 21, 2011 | ArticleLinks | 0 comments »________________________________________________________________
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