Don't look to high yield stocks for high returns

Filed under: Johnson and Johnson (JNJ), JPMorgan Chase (JPM), Procter and Gamble (PG)

Stocks are up this year but not everyone is profiting. One reason is that many investors, stung by the market collapse, have been looking for safety by investing in dividend paying stocks. But Richard Moroney, editor of Dow Theory Forecasts, says that investing for yield is a flawed strategy.

Moroney, a chartered financial analyst, points out that while the S&P 1500 Index is up about 16% so far this year, investors in high-yielding stocks (with yields of 4% or more) have a year-to-date return of just 4%. And he says that stocks that do not pay dividends are up an average of 29%.

We spoke with Richard Moroney to find out why this is the case -- and what income investors should do.

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Don't look to high yield stocks for high returns originally appeared on BloggingStocks on Thu, 18 Jun 2009 17:30:00 EST. Please see our terms for use of feeds.

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