Tag Archives: dividend stocks

Talking About Beating Bond Yields

Charles Wallace, a great business writer, gave me and Dividend Stocks for Dummies a nice write up in his AOL Daily Finance piece on where to invest in a rocky market.

“In a volatile environment, where the stock market can go down and bonds are paying extremely low interest, a good place to beat the rate of return on bonds is dividend stocks,” Lawrence Carrel says. “If you can get potential upside in your investment at a yield that is 60% to 100% better than the 10-year Treasury, why wouldn’t you take it?”

I mention a few stocks posting yields much higher than bonds, as well as Utiities Select Spider Fund (XLU), which currently yields 4.1% or 52% more than the 10-year Treasury.

For the full article go to DailyFinance.


Hear Me on Index Investing Show This Sunday

I will be speaking this coming Sunday (7/25) on New York Radio, AM-710 (WOR) from 10 a.m. to 11 a.m. I will be on The Index Investing Show with Ron DeLegge.

To hear live on the Internet go to http://www.wor710.com/.

I will be discussing the book Dividend Stocks for Dummies.  I will also address the ETFs that track dividend-based indexes, WisdomTree.

MarketWatch Interviews Me on Dividends

Lawrence Carrel, author of “Dividend Stocks for Dummies,” advocates for dividend-heavy portfolios, saying volatile markets are a ripe time to pick paying stocks. With stock values unpredictable, investors find comfort in knowing that they will at least be paid the dividend even if they lose out on stock value, he said.

“More people want the income from dividend stocks now… they’ve had an awakening,” Carrel said. “They are not gung-ho about growth anymore.”

In his book, Carrel outlines several myths that investors harbor about dividend-paying stocks.

Myth 1: Avoid dividend-paying stocks in volatile markets

On the contrary, Carrel sees rocky times as the right time to invest in stocks where you can recoup profits without selling the shares.

“In general, it’s a little less risky,” Carrel said. “There’s the idea that if I’m going to be in an environment and I can’t be sure where the stock price is going to be, at least I will be able to walk away with profits from dividends.”

For the full article go to MarketWatch.

Boomers Likely to Focus on Dividend Stocks

Dividend Stocks for Dummies gets some notice in Canada.

Baby boomers, those born starting in 1946, will reach the traditional retirement age of 65 in 2011. Jonathan Chevreau of the Financial Post writes that without pension plans “boomers won’t abandon their love affair with stocks, despite being jilted by two market crashes in the past decade. However, they will flock to certain types of stocks: those that pay dividends — the juicier the better.”

Why? Dividend-paying stocks offer the promise of growing their dividends at or beyond the rate of inflation.

He says, and so do I, that, such a move to dividend stocks will reap an unexpected bonus: unsought capital gains for the stocks boomers choose — merely because of a growing demand for a finite number of decent-yielding stocks.

“All of which is good timing for a useful new book on this topic: Dividend Stocks for Dummies, by American financial journalist Lawrence Carrel. The title notwithstanding, I’d say dividend investing is for smart investors, not dummies. The book is U.S.-centric but not entirely so. It contains a chapter on international investing but some chapters focusing on the major economic sectors also list some well-known Canadian names.”

Investors are advised to “spread their money across the major economic sectors. Conveniently, those sectors each get a chapter in Part III of the book: Exploring Income-Generating Industries. This is the most interesting section, with chapters devoted to each of utility stocks, energy, telecommunications, consumer goods, and financial stocks (in which he lumps in REITs).

“Each ends with a list of stocks Carrel suggests should be “considered,” complete with ticker symbol, dividend and annual yield as of the end of 2009, listed in descending order by yield. Carrel explains the ins and outs of cyclical stocks and how they behave as the economic cycle progresses, and under different interest rate scenarios.

His 13 financial stocks include four of Canada’s big banks: all but BMO. His list of 12 telecom stocks includes BCE, whose dividend is 6.3%. In addition, a half-page sidebar is devoted to Canada’s royalty trusts and income trusts. Because they’re losing their tax-free status in 2011, Carrel’s recommendation is to “pass” on royalty trusts.

But it’s the sectors NOT represented in Canada, such as consumer goods, that Canadians should focus on. He lists 26 consumer goods firms, with yields from a low of 2.5% for Hasbro to a high of 11.4% for Vector Group.

To read the full story, click here.

Working on a New Book

Please forgive me if I don’t post everyday. I’m currently working on my second book. It’s called Dividend Stocks for Dummies and it will be one of those yellow books in the Dummies Series. I will try to post at least three times a week to the blog. And I will look closer at dividend ETFs. But, I have some tight deadlines on the book and I need to focus on that.