They continue to pay a high yield in order to attract investors who would otherwise consider the risk too great for the reward. You can improve your prospects by customizing your screen with parameters designed to weed out the financially weakest firms. But even then, I think buying the individual stocks is too risky for most investors. Dividends and mutual funds Mutual funds are a better way to go. A good place to look for high-dividend stocks is in equity income funds.
Vanguard allows investors the choice of reinvesting the dividends or taking a distribution.
Other equity-income funds are also worth a look. He says he wants companies with high cash flow, and that one way to measure that is whether they pay dividends. You can find other equity-income funds by using the Fund Screener at MoneyCentral. Search MSN Money tips MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy.