§ Fund Manager: move out of low-yielding bonds and savings accounts into utility and telecom stocks with high dividends.
§ Income-oriented Stock Funds: Vanguard Dividend Growth, T. Rowe Price Dividend Growth
§ Income-oriented ETFs: Vanguard Dividend Appreciation ETF, SPDR S&P Dividend ETF
§ Taxable Money Market Fund Index: Crane 100 index = 0.07%
§ Taxable US Bond Index: Barclays Capital U.S. Aggregate bond index = 3.4%.
§ Average Stock Dividend: 4% and up
§ S&P Dividend Aristocrats = increased dividends 25 years in a row.
§ Bottom Line: 2 year bank CD, TIP and/or short-term investment-grade bond funds at 2% is ok
§ Alternate Line: I-bonds, inflation-adjusted savings bonds at 3.36% are attractive. You can't cash out for at least 12 months, and you forfeit the last three months of interest if you redeem in less than five years. But I-bonds are free of state and local tax.
Source(s): WSJ, Vanguard, Barclays