Investing Insights

It might be tempting to buy dividend stocks with the highest yields, but not all dividend payers are safe. Those big payouts could be signaling that a company’s fundamentals are cracking. Looming financial risks could wreak havoc on income-focused investors’ portfolios. But there are ways to spot dividend traps. Morningstar Indexes strategist and columnist Dan Lefkovitz explains how to avoid the risks.Both healthcare and consumer defensive sectors are lagging the broader stock market this year, but for different reasons.Dan Kemp, chief research and investment officer at Morningstar Investment Management Europe, explored what’s behind it in this week’s Markets Brief column. He says consumer defensive stocks are falling from high valuations, while healthcare stocks are facing significant headwinds like politics and earnings growth. He reminds investors that’s why it’s important to understand not only what you own in your portfolio, but why you own it as well. On this episode:What is a dividend trap, and under w