Downsides of Focusing Too Much on Bond or Stock Dividends

Chasing high-yield dividend stocks has risks. This WSJ article describes several risks of focusing too much on income-producing investments. This was an interesting example of what can happen if you focus too much on dividend-paying stocks:

Yet look at what investors experienced in the iShares Dow Jones Select Dividend Index Fund (DVY). At the end of 2007, 46% of the portfolio was in banks and other financials. During 2008, the fund's value fell 33%. (Today the fund has about 15% in financials.)