Why Investors Are Dumping Dividend Stocks

With 10-year Treasury yields rising to their highest level in more than a year from last summer’s historical lows, it should come as no surprise that stocks which benefitted from a search for yield bonds are now tanking. Earlier in the year, tech was the least-loved sector as investors chased stocks with traditionally high dividends. Now it’s those sectors with steep payouts, the so-called defensive plays including utilities and telecom, that are the dogs of the market.

The turning point appears to have been at the beginning of May when the Federal Reserve’s policy statement said the central bank was prepared to increase or reduce the pace of its bond purchases. Investor focus tended to focus more on the tapering part of the statement and that thinking got a big boost later in the month when Fed Chairman Ben Bernanke told Congress a scaling back of bond purchases could happen over the next few months.

Source: Market Watch

Related Articles:
- Dividend Stocks Are My Conviction
- Are The Dividends Safe For These High-Yielding Stocks?
- My 2012 Top And Bottom Performing Dividend Stocks
- 7 Dividend Stocks With Room To Increase Their Payout
- 9 High Rated, Lower Debt Dividend Stocks With A Reasonable Payout