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By Jeremy Glaser | 01-28-2010 01:18 PM

Boring Is Best for Dividend Seekers

Morningstar's Josh Peters says strong but boring businesses are much more likely to ride out any bubbles or storms that the future may hold.

Jeremy Glaser: I'm Jeremy Glaser with Morningstar.com. Morningstar Dividend Investor just marked its fifth anniversary. I'm here with editor Josh Peters to talk about what the next five years are going to look like for dividend stocks.

Josh, thanks for joining me.

Josh Peters: Happy to be here, Jeremy.

Glaser: Last week, we talked a little bit about how leverage was something that you didn't see on the radar five years ago that kind of caught you by surprise. Is there anything in the next five years you're going to be particularly worried about when you're thinking about stocks to buy for the portfolio?

Peters: I think a continuing theme for the economy, for the financial markets, is going to be bubbles. It's going to be the presence of cheap money, inflating asset prices, and that having knock-on effects that will be negative for the real economy, and it's kind of hard to know where they're going to pop up.

You know, commodities, some have speculated perhaps gold is in some kind of a bubble, or perhaps it would be another energy bubble of some kind, green energy. Technology, if you have the right theme perhaps, there's some reason to believe it could pop up there. I don't think it's going to be a packaged food company or something like that involved, but it's very important to try to avoid these systemic excesses that crop up because you could make a lot of money on the upswing, but when they crack, you know, you could lose 80%-90% of your money and not be able to recover from it.

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