The Mirage of High-Yield Dividend Stocks

My entire investment writing career has occurred in the context of the United States thirty-year treasury yielding 4.5% or less, often dramatically less (think 2% to 3%). Similarly, a stock market boom has also accompanied most of the past decade.

This has meant that certificates of deposit have yielded 1-4%, depending on the amount and length of time that the money must be locked up until maturity. Corporate bonds haven’t yielded much higher, unless they had weak earnings or a credible risk of impending bankruptcy. The stock market isn’t much compared to the corporate bond landscape.

And yet, time after time again, income investors desire investments with high starting yields. And yet, I don’t think investors realize how typically unsustainable a high-yielding investment often turns out to be.

Some illustrative data points:

  1. Of the 122 stocks that traded on the New York Stock Exchange on January 1, 2000 that yielded
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