With taxes on dividends dropping, more stocks are paying dividends. Why shouldn I use dividend-paying stocks instead of convertibles as a source of income?
Convertible securities not only produce income, they also generally have less risk than common stock. In addition, convertible securities are a more dependable source of income than stock dividends. Studies have shown that over a long time period, convertibles tend to offer comparative returns to stocks with significantly lower risk. For investors who already invest in common stocks, convertibles can help diversify their portfolio.
