For one, Genter says that even after many large-cap U.S. dividend-paying stocks enjoyed a sharp rally in 2011 even as the market sputtered, many of these names were not bid up to levels where price-to-earnings ratios became too extended.
Doing so delivers a level of predictable income, rather than relying on what the market does, for investors that typically have about two-thirds of their portfolio in bonds and are looking for cash flow from their equity slice, Genter says.
Dan Genter, president and chief investment officer of RNC Genter Capital Management, says 2012 is already reminding him of 2011, noting that the year started off with investors in a risk-on mindset before that eventually gave way to concerns over the economy.