Why Dividend-Paying Stocks Are Riskier Than You Think
As advisors shift allocations from bonds to high-dividend stocks, they are exposing their clients to equity market risk. But they are also increasing interest-rate risk. Investors in two of the biggest dividend ETFs – SDY and VIG – are among the most exposed to the surging demand for dividend-paying stocks.
Whether or not you think the Federal Reserve has done a good job of managing monetary policy, we likely all agree that it has been very successful in driving down interest rates, and keeping them down for far longer than anyone forecasted (including members of the Fed itself).
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