As if there was any wonder why they have had pretty large inflows in the past few months. I guess you can call stocks the new bonds
“Many income-starved investors have turned to dividend stocks as bond
alternatives. Exchange traded products focused on dividends have rushed
to meet this demand,” according to a recent note from BlackRock. The
firm manages the $13 billion iShares Select Dividend (DVY), one of the largest ETFs in the group.
“Record low yields have led to the bondification of the equity market.
Investors are buying quality companies with predictable earnings and
dividend income,” according to BlackRock.
The only problem is that as the economy improves these stocks will probably not appreciate as fast as the cyclical stocks. In any case being paid to hold a stock is almost always a good idea if the companies are strong.
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