OM DENNE EPISODE
The world has been left bereft of “safe” yield for a decade. And over that time, savers have been required to adjust their perspectives regarding what’s possible in terms of income generation from a portfolio. That thinking has led many to pursue yield from dividend stocks, rather than bonds, as a means to bolster income. That approach may not be appropriate for many, considering:
* While dividend yields from stocks were higher than those available from U.S. Treasuries through much of 2020, that spread has turned negative again (stock market yields are generally lower than high-quality bond yields)* Dividend stocks are still stocks, which means they’re generally risker than investment-grade bonds* A focus on yield, alone, may unintentionally introduce other characteristics to the portfolio that might lead to outcomes different than had been expected
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