Dividend Strategies Underperform In 2012

From The Blog of HORAN Capital Advisors
December 30, 2012 - 5:21pm

One of the hot investment topics of 2012 has centered around dividend paying stocks. With the Federal Reserve pursuing a near zero interest rate policy, the yield on treasury bonds as well as cash have been pegged at a very low level. For investors relying on income, some investment strategists have extolled the virtues of dividend paying stocks with many of the dividend strategies generating yields higher than treasury bonds and cash. For example, the iShares Dow Jones Select Dividend Index (DVY) yields more than 3% while the 10-year treasury yields little more than 1.5%. Now bond risk is a far cry from equity risk; however, the point of this commentary is one might expect dividend paying stocks to be top performers given all the attention they have received this year. Top performers they haven't been though.As the below chart comparing the Powershares Dividend Achievers Portfolio (PFM)...

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