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By Jeremy Glaser | 12-09-2009 09:13 AM

Dividend Stocks and the Quest for Yield

Morningstar DividendInvestor editor Josh Peters says investors should think twice about dramatically reshaping their portfolios in order to get a little more income right now.

Jeremy Glaser: I'm Jeremy Glaser at With interest rates at near zero percent and even long term CDs not looking terribly attractive from a yield perspective, a lot of investors are looking at dividend-paying stocks as a way to boost short-term yield.

Here to discuss this with me is editor of Morningstar DividendInvestor, Josh Peters. Josh, thanks for joining me.

Josh Peters: Happy to be here, Jeremy.

Glaser: What do you think about investors chasing a stock like AT&T for a 6% yield now, versus looking at Treasury bills?

Peters: You would think if I'm editing a newsletter called DividendInvestor I have to be excited that people are taking more interest in dividends again. But the fact of the matter is that you really don't want to get into the business of looking at stocks as a way to juice your income over the short term.

There is really no useful comparison between having a one-year CD and owning 100 shares of AT&T. You own each of those types of investments for very different reasons. If you start thinking in terms of AT&T just has higher income right now than that bank CD has, you might find yourself disappointed with the amount of risk that you're taking in order to get those couple extra percentage points in yield.

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