Early last week, the stock market faced two days of triple-digit moves, yet in the end, they largely cancelled each other out, leaving the Dow Jones Industrials (DJINDICES: ^DJI ) almost unchanged. But several dividend giants in the Dow did much worse.
In the following video, Fool contributor Dan Caplinger provides an explanation for why the Dow's dividend stocks underperformed the broader average. Focusing on the impact of the bond market's swoon, Dan notes that high-quality dividend stocks have been extremely popular lately, and their high valuations have left them somewhat vulnerable to turnarounds when conditions warrant. Dan concludes that attentive investors need to keep their eyes on the bond market for clues on where dividend stocks are headed next.
If you're an investor who prefers returns to rhetoric, you'll want to read The Motley Fool's new free report "5 Dividend Myths ... Busted!" In it, you'll learn which stocks provide premium growth and whether bigger dividends are better. Click here to keep reading.
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