Dividend yields are at decent levels right now, benefiting related exchange traded funds (ETFs), but some say we shouldn’t rest on our laurels.

Last month the credit and housing markets turned over and sent dividends out of the roof to their highest levels in a decade. David Gaffen for The Wall Street Journal points out that if share prices do not repair themselves and shoot upward, the pressure will be on for the yields.

The dividend yield on S&P 500 companies is 3.1%, compared with 1.89% at the beginning of the year, 1.67% five years ago and 1.59% 10 years ago. But Standard & Poor’s has estimated that for the fourth quarter, dividends will fall 10%, making for the worst performance in 50 years.

Still, dividends can remain a sensible strategy thanks to the consistent returns. Dividend paying stocks were some of the best performers last week, and the SPDR S&P Dividend (SDY) jumped 12% in just two weeks. It’s down 23.3% year-to-date.

But dividend yields are in danger and must be defended but the outcome lies in the hands of the market right now.

Tags: Dividend ETFs, SDY