WEE Gather Together in Thanksgiving for November 26,2015

[Demeter]

9. 10 dividend stocks for 2016 with yields up to 15.6%

http://www.marketwatch.com/story/10-dividend-stocks-for-2016-with-yields-up-to-156-2015-11-23

Why buy dividend stocks?

There are two main arguments. Let’s start with ...
... the growth case

If you’re a long-term growth investor, the S&P 500 Dividend Aristocrats SPDAUDP, +0.05% has an excellent record of outperforming the S&P 500 Index SPX, -0.01% It doesn’t matter how high the yields are. This group of 52 S&P 500 companies has simply raised annual dividend payouts for at least 25 consecutive years.

The idea is that this type of consistent track record correlates to strong overall management and shareholder returns in the long haul...Any income investor is aware that with interest rates being so low for so long, market prices for bonds and dividend stocks are likely to fall as the Federal Reserve raises interest rates. But even after the Fed changes direction and begins raising the federal funds rate above the range of zero to 0.25%, where it has been locked since late 2008, rates are likely to remain quite low for a long time.

So the market prices of income-producing securities may not fall as much as many investors fear, or maybe they’ll stage a recovery after the hysteria of the Fed’s likely near-term policy change wears off.

“Based on our economic forecasts, we currently expect the committee to raise the funds rate by 100 basis points next year, or one hike per quarter — a fair amount above the 55-60 basis point pace priced into the bond market,” Goldman Sachs analyst Jan Hatzius said on Friday.

So it cannot be emphasized enough: If your objective is to maximize current income, you need to be able to commit to holding the securities for many years...

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