Record low interest rates on bonds have made stock dividends all the more compelling.
Central banks in Europe and Japan have lowered short-term interest rates below zero, which has caused rates to fall for high quality corporate and government bonds. Low rates overseas also place downward pressure on bond yields in the U.S.
Stocks now yield more than bonds in many countries. In this environment, investors should look to the stock portion of their portfolio to generate income, while being mindful that stocks generally are more volatile than bonds.