3 Dividend Plays Yielding Upward of 5%

First it was green shoots. Then it was fear of a double dip. Now, the memo sent to all talking heads and market watchers says one thing: QE2. Not to be confused with the huge ocean liner of the same name, QE2 is shorthand for, of course, quantitative easing, part two: a follow up to the Fed’s trillion dollar plus purchase of government securities, mostly mortgage backed, as an effort to keep interest rates low. The subtitle for QE2 could be “This time…they mean business.” Seems that the central bank is willing to purchase up to an unfathomable, TWO TRILLION dollars this time in treasury bonds, primarily. Fed Chairman Ben Bernanke alluded to this both in a speech and in recently released FOMC notes.For now, the Fed is merely jawboning (learned that term in high school, senior year econ) the market and for now, it seems to be working. Ten year Treasuries yield an obscene 2.38% while a shorter five year note gives up a whopping 1.10%. The effect on the equity markets has been like turning a teenage girl loose in the mall with a credit card. The Dow Jones Industrial Average has soared 13.76% since the beginning of July. If the Fed was trying to bump stocks along, they’re high fiving each other deep within the echoey bowels of the Mariner S. Eccles building. And they didn’t have to spend any money on Treasuries which most pundits say you shouldn’t even own anyway. But to quote Congressman Eric Cantor, “C’mon!”. We’re talking about the Fed, here folks. If they say they’re going to do something, eventually, they’re gonna do it.... Read more