Don’t Give Up On Dividend Stocks

The whole grain goodness of blue chip dividend stocks has its limits. Utility stocks, consumer staples, pipelines, telecoms and real estate investment trusts have all lost ground over the past month, even while the broader market has been flat. With the bond market signalling an expectation of rising interest rates, the five-year rally for steady blue-chip dividend payers has stalled.

Should you be scared if you own a lot of these stocks either directly or through mutual funds or exchange-traded funds? David Baskin, president of Baskin Financial Services, has a two-pronged answer: Keep your top-quality dividend stocks, but be prepared to follow his firm’s example in trimming holdings. Mr. Baskin believes the selloff of dividend stocks was excessive, but unsurprising at a time when bond yields have surged higher.

Source: Globe and Mail

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