Relying on a single, high-paying dividend stock can be risky

— -- Q: Is Kinder Morgan Energy Partners a good investment for people looking for high dividends?

A: Anytime someone asks me whether a particular individual stock is good for a stream of predictable dividends, I get nervous.

Certainly, Kinder Morgan Energy has a track record of paying rich dividends. And there's no reason at this point to think the dividends will end, unless the bottom falls out of energy prices.

Even so, do you want to bet your income on one company? Many investors are constantly looking for those miracle stocks that are like the fountain of dividends. But over time you'll find that very few individual businesses are that reliable. Raw material costs go up and down, profits ebb and flow and companies' fortunes rise and fall. While Kinder Morgan Energy may chug along just fine, I don't like the idea of counting on just one company to deliver the income you might need.

And that's why it might be a better idea to own a basket of companies that pay high dividends. That way if one company runs into specific problems, the other companies in your basket are likely to keep paying dividends, or even raise them. You might even consider adding some real-estate investment trusts to your portfolio, which are also paying high yields right now.