Interesting research on dividends vs. growth. According to Jeremy Siegel from 1871 through 2003 97% of the market's returns have come from reinvested dividends not capital gains on original principle. More research shows that from 1972 through 2006 S&P stocks not paying dividends returned 4.1% vs. 10.1% from dividend paying stocks. A case can be made to invest in dividend paying stocks for part of your portfolio.
Is part of your portfolio in dividend paying stocks or funds?
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I only own two stocks and both of them are DRIPs (dividend reinvestment plans). They are Exxon and GE. I like the fact that the dividends are automatically reinvested to buy more stock.
Our investment club also owns Exxon (1.7%div), Paychex (3.6%div), and Yum Brands (1.8%div) via DRIPs. Our members like this method of investing.
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