Dividend Stocks Are Better Than Bonds

Ordinarily, there’s a lot to love about bonds — but these are not ordinary times. If anything, it’s time to love dividend stocks. Intense anxiety that the Federal Reserve will start pulling back on quantitative easing — buying billions in Treasuries and mortgage-backed securities every month — has bond prices tumbling. Indeed, the great 30-year bull market in bonds looks like it’s finally coming to an end.

That’s a serious problem for income investors, but it’s not an intractable one. The answer is to cushion your portfolio with high-quality dividend stocks, which in many respects are superior to bonds, anyway. As the equity dividend team at BlackRock notes, high-quality dividend stocks offer a trifecta of desirable attributes: Below-market volatility, Lower prices for higher quality and Income and growth potential. Another great thing about dividend stocks — and this is crucial — is that they do better than bonds in the face of inflation.

Source: Investor Place

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