Income-seeking investors are today naively looking for shelter in some of the most heinously over-valued assets of all time. Dividend income is always sorely insufficient compensation for huge capital losses. Losses of more than 50% were experienced in these equities in both the 2001 and 2008 bear markets. Utilities, financials, telecom, REITs. Defensive, not!
Not only that, but as many companies have already started doing, once cash flows get tight corporations cut dividends (as they should) and equity holders are left with zero recourse. That’s when capital losses rapidly accelerate as everyone races for the exits at once. You’ve been warned.
Tell your broker utilities are NOT “safe”… pic.twitter.com/XAhvh4k2KC
— Cory Venable CMT (@CoryLVenable) February 26, 2016
There are wolves in the dividend house… pic.twitter.com/1EGSTq06lr
— Cory Venable CMT (@CoryLVenable) February 26, 2016
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