Are dividend stocks in a bubble?

Lowell Miller isn't your standard slick Wall Street mogul. A sandal-wearing self-described "reformed hippie" who once wrote poems for Rolling Stone, the 64-year-old runs a thriving $4 billion investment business in, of all places, the bohemian hamlet of Woodstock, N.Y. Asked the obvious question -- "Were you there in '69?" -- he confesses that he missed the legendary concert because of heavy traffic.

So are dividend stocks still a good investment? The answer is a resounding yes. The challenge is shifting from the traditional, overbought categories of income stocks into more overlooked choices. Here's why a high-income strategy is just as compelling as ever, maybe more so. Today equity investors are facing a future of mediocre returns. In general the return you can expect from stocks is the sum of the dividend yield and the growth of earnings. Right now the yield on the S&P 500 is hovering around 2%, less than half its historical average.

Source: Forbes

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