Dividend trend near an end?

Stampede into stocks that offer big payouts pushing share prices sky high; other income-producers exist
FEB 05, 2013
Income seekers need to have an open mind now more than ever, even when it comes to one of the more trendy plays, dividend stocks. Most investors already know that traditional sources of income like Treasurys and investment grade bonds come with puny yields these days. But investors' recent favorite income source — stocks that throw off high dividends — are starting to look expensive too, according to Goldman Sachs Asset Management. The solution, said Glen Casey, global head of global product strategy and development for GSAM, is to start looking more broadly for income producers. “The traditional ways are gone,” he said. “Investors need to take a more thoughtful approach to dividend investing. There's a clear need for products that address current income needs.” Goldman Sachs recently revamped its balanced fund to make it an income building fund to meet that need. The newly dubbed Goldman Sachs Income Builder Ticker:(GSBFX) is still a balanced fund, in the sense that it's starting point will be a 50/50 split between stocks and bonds. The fund's managers will look to offer substantially higher yields than the S&P 500, however. “The emphasis is on a consistent level of income,” Mr. Casey said. The fund will invest in a mix of high dividend stocks, master limited partnerships, high yield bonds, real estate investment trusts, non-U.S. bonds, convertibles and preferred shares. The diversification between asset classes, should in theory, make the fund less volatile than a straight dividend equity fund or high yield bond fund.

Latest News

Advisor moves: &Partners lands Oklahoma team, EP Wealth adds in Denver
Advisor moves: &Partners lands Oklahoma team, EP Wealth adds in Denver

Ballast Rock Private Wealth has also brough on a veteran advisor focused on multigenerational planning for business owners and families

Ascensus courts advisors with workplace-to-wealth referral platform
Ascensus courts advisors with workplace-to-wealth referral platform

The Pennsylvania-based recordkeeper is 'playing Switzerland' as data on 16 million savers will help plan advisors reach 401(k) participants at rollovers and retirement

Investment banking revenue nears $1.1 trillion as nonbanks surge
Investment banking revenue nears $1.1 trillion as nonbanks surge

A BCG report finds private credit and hedge funds driving CIB growth while AI reshapes bank operating economics through 2030.

Janney adds $3.5B Texas team as Rockefeller also targets the Sun Belt
Janney adds $3.5B Texas team as Rockefeller also targets the Sun Belt

Janney opens a Houston office with four advisors from Raymond James as Rockefeller deepens its Naples, Florida wealth management footprint.

The childless client blind spot that’s leaving serious money on the table
The childless client blind spot that’s leaving serious money on the table

Bernstein Private Wealth experts says childless adults hold significant wealth yet rarely have a plan.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor