Me? I still prefer picking individual stocks and building my own equity income portfolio to investing in a fund. But who am I to say? I ought to take a small stake in a dividend aristocrat or high yield dividend fund and see how their performance compares to mine.

At least I’m avoiding fees, but I can’t say I’m too impressed by the performance of my own portfolio Were it not for some tech names that I added to my portfolio coming out of the Great Recession (thank you, Microsoft) that paid fairly attractive dividends at the time. I suspect the overall performance of my portfolio would trail the market on a total return basis if it weren’t for some dividend paying stocks that turned out to be better growth prospects than I suspected at the time.

still, I take comfort when high yielding dividend funds come under scrutiny or criticism. The Wall Street Journal concludes that high yield equity funds are sometimes leaving investors behind the pack.

Falling interest rates have driven some income focused investors looking to high dividend funds to offset lower interest income on CDs and bonds. The gist of the Wall Street Journal story is that buyers of high dividend yield funds need to be cautious about unintended consequences.

“You need to guard against needless tax bills, overexposure to narrow segments of the market and the chance of deep long-term losses,” WSJ writer Jason Zweig said in the story.

Super high yielding stocks often come with super high risk prospects. And some companies offering unusually high yields are doing so to attract investors despite their shaky business prospects. The tax treatment of many of these high yield funds, leaving investors liable for “ordinary income” tax rates, is also a detriment.

High exposure to sectors such as energy and financial stocks also create potential for higher risks when these sectors come under stress.

One thing I try to do is make sure my portfolio of dividend stocks remains diversified. Even if I give up some yield on the dividend paying tech stocks in my portfolio, it expands the number sectors included in my portfolio. (And maybe adds some growth potential to what’s essentially a value oriented investment strategy, in my case.)

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