The Never-Ending Search for Yield Leads to U.S. Dividend Stocks
iShares Dow Jones Select Dividend Index (DVY) has rebounded by 3% after declining throughout the month of July. The dividend exchange-traded fund is mostly weighted by Lockheed Martin (LMT) , Chevron (CVX) , Philip Morris International (PM) , ConocoPhillips (COP) and McDonald's (MCD) .
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The rush of funds has accelerated recently as weak economic data in Europe and the U.S. led investors to believe few developed economies were interested in raising benchmark lending rates anytime soon.
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As global interest rates have been pushed to record lows, investors have been forced to seek out relatively safe investments that can also deliver some semblance of return.
That journey has led them back into U.S. stocks, and more specifically dividend-bearing stocks. U.S. dividend stocks offer the safety of being in a moderately growing economy, alongside steadily improving corporate earnings.
Interest rates have been pushed lower in the United States on geopolitical and economic reasons. For most of the year, fear of violence overseas in Gaza, Iraq, and Ukraine have pushed funds into U.S. assets, such as iShares Barclays 20+ Year Treasury Bond (TLT) and PowerShares DB US Dollar Index Bullish (UUP) .
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