Since the eurozone bailout programs began, there has been an austerity pre-condition. That’s mostly the result of German strong-arm tactics designed to get the 17 member states of the eurozone to restructure social programs so as to level the playing field in a way that supports the euro. There is a move afoot among European Union (EU) politicians that austerity is simply not working. Couple that with clear evidence that the US economy is gaining momentum – albeit ever so slowly – and more academic literature challenging the austerity approach, and some European politicians are beginning to lean towards less “austerity” and a more growth-oriented strategy.

With most GICs paying less than 2% interest and many fixed income investments expected to return low single digits for the coming year, income seeking investors need to look elsewhere to find any form of meaningful cash flow from their investments. Finding a high-quality fund that pays out a decent cash flow without significantly eroding invested capital can be a very daunting task these days.

Dividends are in fashion with investors right now, and that’s always a good thing. After all, creative accounting can produce false impressions of prosperity and hide embarrassing financial problems. But accounting can’t create cash for this year’s dividend, let alone conjure up a history of past dividends. Stick to dividend payers and you’ll avoid most of the market’s greatest disasters.