No. of Recommendations: 9
Sometimes, “blue chip” dividend payers can be a reasonably safe alternative to T-Bills when the latter yields next to nothing.
Even Buffett was buying stocks like Verizon and HP a few years ago. I doubt he bought them for their growth or significant undervaluation.
Plus the lower tax rate on qualified dividends tilts the scales further towards dividends over interest income.
Finally dividends will very likely grow in real terms, unlike yields on cash.
There will be an occasional bust up like GE, but so do investments selected for growth and undervaluation and other criteria, e.g OXY.
I feel a diversified basket of “blue chip” dividend payers can be a better alternative to the formulaic allocation to bonds in many portfolios.
