The Wall Street Journal reports on investors’ recent moves toward high-dividend stocks. Stocks in the S&P High Yield Dividend Aristocrats Index (which have increased their dividends every year for at least 20 years) are up 1.9% this year, while the S&P is down 4.3%. The return on the Dow Jones U.S. Dividend 100 Index (which consists of consistently high paying stocks) is down 0.8%. One reason for the interest in dividend payers is the perception that further Fed rate hikes are increasingly unlikely. Years of low rates make bonds less attractive. As James Paulsen, CIO at Wells Capital Management, puts it: “What better value enhancer for dividend yielders than the threat of the fixed-income market going to negative yields?” Paulsen continues: “why not substitute high-quality, well-financed dividend payers for part of the portfolio bond allocation.” Others view such an approach as a risky bet because dividend-paying stocks tend to suffer when rates rise. Nick Krsnich of JMN Investment Management said, “When I look at high-dividend blue-chip stocks . . . I see price/earnings multiples around 20 in a world of slow growth,” which “isn’t very attractive.” Allan Roth of Wealth Logic echoes the sentiment: “It’s a huge mistake to chase income and think that income is a bond substitute.” But Michael Fredricks says he is sticking with dividend payers in managing the BlackRock Multi-Asset Income Fund, commenting that “these are exactly the type of stocks we think make sense for an environment that is uncertain.” Mike Barclay of Columbia Threadneedle Investments suggests that the approach makes sense as a response to changes affecting investors: “the traditional playbook has been you get to a certain age and you put everything into fixed income,” but now “you have to think about your investments growing even in retirement.”