Dear Mr. Berko:

We sold our home in 2007 and took back a five-year, $48,000 balloon second mortgage at 8.5 percent. It’s now due, so we have $48,000 to invest in dividend stocks. Our broker tried to sell us a variable annuity. When we told him that we don’t like annuities, he became huffy. He said he’d do some research and call us back the next day with other recommendations. He called back and presented two bond mutual funds yielding 4.5 percent, but we didn’t want mutual funds, and he got huffy again. Then he called back the following day and recommended iShares High Dividend Equity and iShares Dow Jones Select Dividend Index, which together would yield 3 percent. We wanted a better yield, but he said that other than the 5 percent his variable annuity or the mutual fund he recommends would yield, a higher yield would be very speculative and dangerous in this market. What do you think of the iShares funds? Could you recommend some issues that are not speculative and that would give us a better current return? We don’t mind some principal risk if we can get a dependable and higher dividend return.

T.S., Detroit

Dear T.S.:

Wow! If I were a broker, I wouldn’t want you as my client. Earning a living as a stockbroker is not easy these days, and you’re making this poor fellow’s job even more difficult. This good lad is trying to help you and earn a few thousand dollars, and in the process, you’ve slammed the door in his face – twice. Now he’s willing to settle for a niggardly $500 commission with those iShares recommendations, which, by the way, would cost you $18 if purchased through Vanguard, Schwab or Fidelity. And though he may be a sincere and kind fellow, I think his iShares recommendations stink. Frankly, they are basically the same or either.

Today most brokers spend lots of training time in “proprietary product school,” so they would really rather recommend a proprietary product than they would individual issues listed on the Big Board. And that’s understandable because selecting good individual income/growth stocks necessitates a little bit of skill. It requires time, a modicum of knowledge, detailed research, confidence you’ve chosen the right issues and a willingness to accept responsibility for your recommendations. This broker sounds about as smart as a pound of wet liver.

The following are some dividend growth stocks from my 2012 list:

• W.P. Carey & Co. LLC (WPC-$49.50) manages 14 million square feet of triple net commercial property, yields 5.3 percent and has a long record of dividend growth.

• National Grid PLC (NGG-$56.25) operates electricity and gas infrastructure facilities in England, the U.S. and Canada, yields 7.2 percent and enjoys a good dividend growth record.

• Reynolds American Inc. (RAI-$43.75) sells Camel, Winston, Misty, Salem and other tobacco products and yields 5.4 percent. RAI has an excellent record of dividend growth.

• Linn Energy LLC (LINE-$41.46), yielding 7 percent, acquires and develops properties in the U.S. and has a fine record of dividend growth.

• AstraZenica PLC (AZN-$46.92), a $31 billion pharmaceutical company based across the pond in the U.K., has a dependable dividend growth record and yields 6.1 percent.

• Buckeye Partners LP (BPL-$48.24), a huge oil and gas pipeline company, pays a dividend yielding 8.6 percent that is 95 percent nontaxable. BPL has an established dividend growth record.

• Vanguard Natural Resources LLC (VNR-$28.79) acquires oil and gas properties in the U.S. and sports an 8.3 percent yield. Its dividend growth record is very attractive.

• ConocoPhillips (COP-$57.17), a global oil company yielding 4.6 percent, has a proven record of dividend growth.

• And finally, buy Gabelli Global Deal Fund (GDL-$11.83), a speculative closed-end management company trading at a 12 percent discount to net asset value that yields 10.8 percent. It has limited dividend growth but may have rewarding appreciation potential.

Investing equal amounts in those nine issues will give you a 6 percent current yield, yearly dividend growth and potentially attractive capital gains. Avoid your huffy brokster and purchase these issues at a discount brokerage, where your commission costs will be less than $80, versus about $600 at a big-box broker.