Outside the Box: This is the problem with chasing dividend yield

I was reviewing a new client’s portfolio and found it full of the likes of Coca-Cola, Kimberly-Clark, and Campbell Soup — what I call (pseudo) bond substitutes.

Each of these are stable and mature companies. Your mother-in-law would be proud if you worked for any one of them. They have had a fabulous past; they’ve grown revenues and earnings for decades. They were in their glory days when most baby boomers were coming of age. But the days of growth are in the rearview mirror for these companies — their markets are mature, and the market share of competitors is high.

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