That may well have increased the ex post risk premium (otherthingsbeing equal, a fallinthedividend yieldfrom 4% to 2% meansinvestorsdoubletheir money).
Diversification, attention to debt levels, and being aware of the risks in each individual stock will help build a portfolio that pays an above-average dividendyield but also mitigates risk.
This is done by extrapolating a company's earnings out five years, then weighing its expected earnings and dividend streams against its historical stock price volatility (reflecting risk) and the AAA bond yield (reflecting opportunity cost).