Investing In High Dividend Stocks The Smart Way

Investors seeking long term value, or return, have been as elusive as finding a bank willing to loan a mortgage to an individual with a credit score below 720. The market has been reacting to news from Washington or the Euro Zone, leaving fundamental company analysis completely out the window. The recent performance of the market would have been worse had it not been for the old, boring dividend paying companies. Dividend paying companies produced all of last year’s 2.1% return and made positive economic contributions for all of the 2000s.

This, I am sure, came as a shock to Baby Boomers who were accustomed to stock dividends, in the 1990s, paying 2.8% versus rallying stock prices of 15.3%. It should come as no surprise to see investors seeking stable, less risky ground in the market through cash rich, yield paying companies. The demand for stable dividend payers is supported by various demographic trends, including the recent increase of nearly 7,000 Baby Boomers turning 65 years old every day, seeking ways of earning income that can keep pace with inflation.

Source: Forbes

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