Three top dividend funds to buy feature the cream from investment firm Cohen & Steers, offering high yields and protection from the worst damage if the market tanks again in the weeks and months ahead.

The three top dividend funds benefit from “active portfolio managers” who can choose their holdings, in contrast to inflexible funds that track the performance of a market index, such as the Dow Jones Industrial Average, the Standard & Poor’s 500 or the NASDAQ. During the stock market’s drop in March, active managers could limit their risk by scooping up quality assets that were selling at deep discounts.

“There was a lot of forced selling in March because leveraged investors faced margin calls as prices declined,” said Bob Carlson, who is chairman of the Board of Trustees of Virginia’s Fairfax County Employees’ Retirement System with more than $4 billion in assets. “To raise cash, they had to sell assets. They sold high-quality assets because there were no buyers for low-quality assets at the time.”

3 Top Dividend Funds to Buy Offer High Yields

Carlson, who mostly recommends funds in his Retirement Watch advisory service, said leveraged investors who held high-quality assets dumped them in distress sales. The selling turned the quality assets into “bargains” for others, he added.

Retirement Watch advisory service

Bob Carlson, of Retirement Watch, responds to Paul Dykewicz’s questions during an interview.

Chart courtesy of www.StockCharts.com

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Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce,Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz.The book is endorsed by Joe Montana, Joe Theismann, Ara Paseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Follow Paul on Twitter @PaulDykewicz.