Bank of America Corp (BAC): Should You Avoid the Most Volatile Stocks on the Dow Jones Industrial Average (.DJI)?

Alcoa Inc (NYSE:AA) slashed its dividends at the ankles in 2009, just like Bank of America Corp (NYSE:BAC), and investors are still waiting for a sign of stronger payouts. Caterpillar Inc. (NYSE:CAT) is different because, thanks to its healthy cash flows, it never cut its dividends, and it shows in the stock price. Alcoa and Bank of America are still looking for that magic turn of phrase that would restore their share prices to pre-crisis levels, while the Cat never stopped more or less pacing the Dow.

BAC Total Return Price data by YCharts.

Story stocks versus fundamental fortresses
When it comes to these two types of investments, buy the former if they’re cheap and you foresee their stories reaching a happy ending; buy the latter if you just want rock-solid returns and a good night’s sleep.

The article Should You Avoid the Most Volatile Stocks on the Dow? originally appeared on Fool.com and is written by Anders Bylund.

Fool contributor Anders Bylund holds no position in any company mentioned. Check out Anders’ bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Bank of America. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.