Digging for Dividends

The lastest worldly economic failures have caused interest rates to greatly fall and have directed investors towards government bonds in a flight to safety. What does this do? An increased demand in bonds increases the price of bonds, and falling interest rates cause coupons on bonds to fall, both creating lower yields on bonds. For ivnestors looking for higher yields and a little more risk, investors should look to long standing healthy companies that have dividend yields because these companies dividends are outyielding government bonds. Strong comapanies such as Coca-Cola, Johnson & Johnson, and Procter & Gamble have all had steady consistent dividend distributions for the last decade and yield more the the current 10 year government bond in the U.S. If you are willing to take a little more risk, not only can you have greater yield on your investments, but these companies also have potential for capital apprectiation, which is unlikely in this economic environment for bonds within the next five years. If you can afford to take a little more risk, these consistent dividend providers are a better choice than government bonds right now.