A number of important large-cap companies such as Cisco, Texas Instruments and Microsoft have announced dividend increases. A little unusual for the technology sector.
One of the things necessary to get the market to have legs is to get the retail investors to get back into stocks from fixed income investments (bonds). The best way to do that is if stocks become competitive in terms of yield, when compared with fixed income bonds and mutual funds.
When that happens investors will inevitably chase the yield and start pumping money into the dividend paying stocks and mutual funds. That increased demand will drive stock and mutual fund prices higher. Not only do you collect the dividend you also capture the capital appreciation as the stock price increases. But you need to be in the game early to get the most benefit.
There’s a huge appetite for yield and that’s where your money should be.
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