Since the Great Recession, those investors seeking income have had to look outside the proverbial box to find it. You used to be able to buy a portfolio of bonds, cash and CDs, sit back, and collect enough yield in order to fund your lifestyle. However, as the economy crashed, the Fed ended that scenario. With interest rates at zero, these sorts of traditional income products weren’t cutting it.
And in that, investors were forced to look elsewhere. One of the biggest winners of the search for yield has been dividend stocks.
With the Fed once again cutting rates towards zero and the overall volatility of bonds now matching stocks, there can be something said for not including them in your portfolio at all. This certainly flips the traditional 60/40 balanced portfolio on its head and makes for an interesting play for investors. The reality is that dividend stocks could actually be a smart bond replacement for investors.
Consumer Staples may be primed for continued growth. Find out why here.
