There seem to be a phenomenon of real estate investment trusts and blue chip dividend stocks running like nobody business.
A review of my dividend stock tracker seem to show a lot of the yield stocks’ yields compressing.
Starhub for no reason ran from $3 to $3.40. All the REITs are doing very well. So much so that there are only a handful of yielders having yields in excess of 8%.
What could be the reason?
Could it be the market volatility result in these stocks being perceived to be safer?
Could the low savings rate and high inflation result in people searching for better yields?
High yielding dividend stocks tend to do best in low growth environment (See article on historical behavior of dividend stocks)
Whatever it is, I am having trouble evaluating risk versus reward to add my monthly savings.
One thing we need to see is for the DPU for these stocks to go up to justify the rises in prices.