Last week, the Dow Industrials reached an all-time high. At the same time, the Fed has been keeping interest rates at all-time lows. This low interest rate environment has driven many investors looking for income toward dividend stocks.
With all the money flowing into the stock market and specifically dividend stocks, there is a threat that dividend growth stocks will form a bubble. In fact, there has been talk of a dividend growth stock bubble for much of the past year by many opponents of dividend growth investing. I have always been one who has pointed out the many dividend growth stocks that are trading at fair valuations, but recently this practice has become more and more challenging.