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The Rise in Bond Yields Is Bullish for Dividend Stocks

One of the biggest relationships we’ve seen over the last few years has been that lower bond yields and interest rates propelling stocks higher. This has been particularly true for dividend stocks. As investors haven’t been able to get needed yield from traditional products like bonds or CDs, they’ve been forced to take refuge in dividend payers, REITs and other high-yielding securities.

However, the Treasury market is seeing some unusual activity. Bond yields are actually starting to rise and hit highs not seen for quite a while.

And at first blush, this may scare off some investors. After all, you could argue that the reason why many dividend-paying stocks and broad indices are up big time is because of the shift toward lower rates/yields. However, this time could be different. Thanks to a variety of other factors, the rise in bond yields could actually be very bullish for stocks and dividend payers.

At this point, do you even need bonds? Find the answer here

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Nov 21, 2019