Markets Are Rewarding Companies That Pay Dividends : Slow economic growth. Whipsawing volatility. In an environment like this, it is little wonder investors are piling into stocks with steady dividend payments.
Mutual funds specializing in dividend stocks have seen inflows of $12.6 billion so far this year, four times as much as in all of 2010—even as stock funds as a whole have posted outflows of nearly $25 billion, according to fund tracker Lipper.
But dividend stocks aren't a panacea—and buying them willy-nilly can lead to disappointment down the road. Dividend stocks are notorious laggards during big rallies, which often start when investors are most averse to risk. source online.wsj.com
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