August 3, 2010 - With the market showing some signs of life, it's easy to believe there's a rally about to happen. Not just a few hundred points, but a real rally that will take the Dow Jones Industrial Average above 11,000. Not gonna happen.

No, there isn't a great silver lining in all these clouds. Not yet anyway. Investors need to realize that capital gains on stocks will be hard to obtain. Even when some stocks do better, small adverse conditions knock prices down to previous or lower levels. Profits come slow. Losses come fast.

In this environment, dividends can give great rewards and peace of mind. The following 4 stocks and 1 mutual fund have high dividends and could be a good fit for investors who want to add income to their portfolios. Further research into each is highly recommended. Some are only for the most adventurous. The ones with the highest yields.

- NLY: Yield: 15.88%. A real estate investment trust (REIT), Annaly Capital Management invests in and manages mortgage-backed securities. Among its investments are mortgage pass-through certificates, collateralized mortgage obligations, and agency callable debentures. Certificates are issued or guaranteed by third-party issuers like Freddie Mac, Fannie Mae, and Ginnie Mae. At least 75% of its assets are high-quality, mortgage-backed securities or short-term investments. All of the REIT's assets are agency certificates with implied AAA ratings backed by single-family residential mortgages. Subsidiary Fixed Income Discount Advisory Company (FIDAC) provides investment advisory services.

- PDLI: Yield 15.6% (last year..actual yield for this year not yet known but 50 cents was paid last distribution in June....dividend was paid twice last year in June and December). PDL BioPharma, Inc. engages in the management of antibody humanization patents and royalty assets, which consist of Queen et al. patents and license agreements with various biotechnology and pharmaceutical companies. Its Queen et al. patents primarily cover humanized antibodies, methods for humanizing antibodies, polynucleotide encoding in humanized antibodies, and methods of producing humanized antibodies. The company was formerly known as Protein Design Labs, Inc. and changed its name to PDL BioPharma, Inc. in 2006. PDL BioPharma, Inc. was founded in 1986 and is headquartered in Incline Village, Nevada.

- BGCP: Yield: 10.1%. BGC Partners operates as a financial intermediary to the financial markets specializing in the brokering of various financial products. It provides electronic marketplaces, including government bond markets, spot foreign exchange, foreign exchange options, and credit default swaps in various financial markets through its eSpeed- and BGC Trader- branded trading platform which can be accessed through its high speed data network, over the Internet, or third party communication networks.

- FAX: Yield: 6.8%. Aberdeen Asia-Pacific Income Fund operates as a closed-end, non-diversified management investment company. The fund primarily invests in Asian, Australian, and New Zealand, the United States, Canada, and western Europe debt securities. Its portfolio of investments includes securities issued by governmental entities, banks, companies, and other entities. Aberdeen Asset Management Asia Limited serves as the investment manager of the fund. Aberdeen Asia-Pacific Income Fund was incorporated in 1986 and is based in Plainsboro, New Jersey.

- NYB: Yield: 6%. New York Community Bancorp operates as a multi-bank holding company for New York Community Bank and New York Commercial Bank, which offers banking products and services in New York, New Jersey, Ohio, Florida,and Arizona.

It primarily engages in generating deposits and originating loans. The company's deposit products include checking and savings accounts, certificates of deposit, individual retirement accounts, NOW and moneymarket accounts, and non-interest-bearing demand deposit accounts.

Its lending portfolio comprises one- to four-family loans; multi-family loans; commercial real estate loans; acquisition, development, and construction loans; commercial and industrial loans; and consumer loans. New York Community Bancorp also provides cash management, online banking, automated teller machine (ATM), and phone banking services.

Again, investors need to dig deeper into each of these to get a comfort level. And a well diversified portfolio is always a sound approach.

- Ted Allrich