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Investing Specialists

Top Dividend Stocks of Our Ultimate Stock-Pickers

While few of our Ultimate Stock-Pickers focus solely on dividends, income-paying stocks continue to work their way into the portfolios of our top managers.

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By Greggory Warren, CFA | Senior Stock Analyst

Stock markets can be fickle things at times. After running up more than 12% during the first quarter of 2012, the U.S. markets (as exemplified by the S&P 500 Index) declined 1% in April, dropped another 6% during May, and then fell 3% on the first trading day of June. Since then the trend has been more positive than negative, with the benchmark index rising 5% over the last two weeks of trading. This type of volatility does nothing to calm investors, who have been in risk-aversion mode for much of the last three years. According to data provided by Morningstar Direct, investors have pulled more than $14 billion out of actively managed U.S stock funds since the start of the second quarter, putting them on pace to exceed the nearly $22 billion that flowed out of these type of funds during the first quarter (with more than half that total taking place in the month of March). While this may look less dire when compared with the more than $45 billion that flowed out of actively managed U.S stock funds in both the third and fourth quarters of 2011, it should be noted that outflows in the second quarter of last year reached $22 billion. And that was before the concerns that had emerged around the European debt crisis, as well as the political wrangling over the debt ceiling here in the United States, had a major impact on global stock markets last year. While concerns over the European debt crisis have never really gone away, fears have arisen once again this year, as Spain and Italy seem determined to go down the same road to insolvency that Greece has been on since the second quarter of 2010. With the economic recovery in the U.S. seeming to have stalled of late, China seeing signs of slowing growth in its own economy, and the European Union on the brink of falling apart (even with the positive results that were reported in the Greek elections over the weekend), it is getting harder and harder to see a clear path for stronger market returns in the back half of 2012.

The Morningstar Ultimate Stock-Pickers Team has a position in the following securities mentioned above: AMANX. Find out about Morningstar’s editorial policies.