No one needs to be reminded how grim it has become to find income-generating investments. Consider: This is the toughest environment for yield since 1871, according to recent research by O'Shaughnessy Asset Management, a quantitative money-management firm. A portfolio allocated 60% to stocks and 40% to bonds would have yielded an average 4.4% a year over that period. Today it would offer just 1.9%.
There's no relief in sight. Bonds look perilous, and baby boomers have begun retiring, fueling more appetite for income-producing assets. The result: soaring demand (and prices) for U.S. dividend stocks.