A Response to Dividend “Myth Busters”

In a recent Forbes article titled “The Myths About Dividend Investing,” an author questions some of the fundamental tenets of dividend oriented investing. While the article is thoughtful and well-written, we believe it doesn’t accurately reflect the advantages that a research-based dividend strategy can bring to many investors. With interest rates at historically low levels and more and more investors searching for responsible ways to generate yield from their portfolios, this topic couldn’t be timelier. What follow is a summary of the article’s main points (in italics) along with our perspective.

Investors are chasing yield and have driven prices to unsustainable levels.

Some income-oriented asset classes including investment grade bonds, junk bonds and utilities are selling at historically high levels. Other income asset classes are currently near or below their historical valuation levels, including telecoms, master limited partnerships and many dividend paying international stocks.¬†Read the rest of the article here…