In Search of Yield, Investors Substituting Dividends for Bonds. Not Smart

Interesting blog post from Vanguard I thought I would share: "More than $18 billion has poured into the Lipper Equity Income category (mutual funds and ETFs) through September 2011, the largest amount of cash flow of any Lipper equity fund category year to date. This seems to suggest investors may be looking beyond bonds in search of income. In a new blog post, Vanguard Chief Economist Joe Davis cautions investors that substituting dividend-paying stocks for bonds entails taking on greater risk. Read the complete post ''Dividend-paying stocks are not bonds.'"