Dividend Stocks Look More Attractive Now

In recent years, dividend stocks have been hot. Investors have flocked to dividend-paying stocks as a result of the Federal Reserve's near-zero interest rate policy and its aggressive bond-buying which have made it more difficult to find yield. In the pursuit of yield, investors have been pulling money out of fixed income and put it to work in dividend stocks. This dividend strategy has paid off well for investors, but we are starting to see signs that dividend stocks are losing their attractiveness.

To me, the important questions are why is this happening, and will it last? The answer to the question of why can once again be tied back to the Federal Reserve. While the Fed continues it monetary easing for now, it has begun to send out signals that it could begin slowing it down at its next meetings. While I understand why investors are fleeing dividend stocks at the current time, I do not believe that the trend will last. The smart money is going to look at the current selling as a buying opportunity. If there are any dividend stocks that you have wanted to purchase on a pullback, that opportunity is now here.

Source: Market Intelligence Center

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