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Pat Dorsey: Avoid the Rush to Safety in 'Unsafe' Places
Posted by: Dheeraj Grover (IP Logged)
Date: August 15, 2012 08:06AM
Pat Dorsey, president, Sanibel Captiva Investment Advisers, author of the value investing book "Little Book That Builds Wealth" and former director of research of Morningstar was on Bloomberg to discuss his views on long-term corporate bonds and how investors should not rush towards supposedly safe corporate bonds. He also sheds light on his investment strategy.
-- Interest rate risk associated with 30-year long term bonds from safe and well-established corporations is very high.
-- Investors will lose money by investing in these 30-year bonds long term.
-- High yield dividend, paying stocks are much safer investments as dividends will grow and will protect your investment from inflation vs. 30-year, long-term bonds which will not.
-- Buying dividend equities story is not new but story of 7-8% dividend growth is untapped
-- Best stock idea now: GE. GE Capital is fixed now and providing $3 billion in dividends to the parent company. Also, GE's dividend is expected to grow much faster, providing high total returns.
Here is the video:
Stocks Discussed: GE, KMP, T, VZ, WMB,