One of the downsides of popularity, at least as far as investments are concerned, is that when more people think an investment is good, its price rises. After a certain point, the price becomes so high that the investment becomes less attractive because there is less chance its price will rise further.
The almost schizoid implication, therefore, is to buy stocks that no one really likes before the stocks become likable and then sell the stocks when everyone likes them but before everyone dislikes them again for being too expensive.
So where are dividend stocks on this roller coaster?
Dividend Stocks in a Bubble
Seth Masters, chief investment officer at Bernstein Global Wealth Management, said recently in The Wall Street Journal that dividend stocks are in a bubble because investors had been so hungry for safety that they bid up the price of dividend-paying stocks.