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It is highly likely that dividend income will increase by 2018.
Kent L. Johnson, co-manager of the Sit Dividend Growth fund, agreed that dividend investors should not overlook tech.
The study notes that dividend payments as a proportion of corporate earnings have been declining for decades, so the effect of higher tax rates could be muted.
CHRIS CORDARO, chief investment officer at RegentAtlantic Capital, added that dividend seekers should also be willing to look abroad for reasonably priced sources of income.
"In recent months, we've been stressing that dividend yield has been underappreciated," said Richard Bernstein, chief United States strategist at Merrill Lynch.
He proposed that dividend payments be tax-free — but only if the company could show that the dividends were being paid out of profits on which federal income taxes had in fact been paid.
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He also said that dividend-paying stocks could be a first step for investors moving out of bonds.
REUTERS Steinhardt Argues for Equities | Michael H. Steinhardt, chairman of Wisdom Tree Investments, said on Bloomberg Television that dividend-paying stocks were a better investment than bonds.
After the summer, he and many other analysts pointed out that dividend-paying stocks were a good option for income when the yields on 10-year Treasuries fell to around 2 percent.
In such an income-starved environment, this means that dividend-paying stocks — many of which yield more than 10-year Treasury notes — should do particularly well, market watchers say.
How will America's economy fare when there are intellectual blackouts at Intel, Microsoft and I.B.M. because their investors think that dividend-tax breaks are more important than ever-faster chips and more productive software?
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