BAML: Dangerous yield chasing

The perfect hands-free investment plan is to buy dividend stocks with an attractive dividend yield, sit back and watch the income flow. Such a strategy requires little or no input from the investor.

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However, in today’s low-interest rate world, a passive dividend income strategy has become an unattainable goal. At the time of writing, the US 10-year Treasury yield stands at 1.53%, and the average yield for the S&P 500 is not much higher at 2.04%. That’s less than half the mean S&P 500 dividend yield of the past 150 years. The mean dividend yield for the S&P 500 since 1871 is 4.39%.

Unable to find much in the way of yield...