Summertime Is When Dividend Stocks Shine

There’s no such thing as an investment for all seasons, but dividend-paying stocks come close. When the market rallies, dividend stocks generally post solid but not market-beating returns. If stocks decline, dividend-payers are unlikely to fall as steeply. Part of the reason is that dividend-paying companies are typically mature and large, with steady sources of revenue that hold up when the economy skids

What’s less well-known is a seasonal performance difference. Dividend-paying stocks typically post better results than non-payers from May through October. The mid-year advantage for dividend stocks is documented in recent research that puts a new spin on the well-known seasonal stock investing advice to “Sell in May and go away.” It turns out that selling before summer doesn’t necessarily make sense with stocks that pay dividends.

Source: MyCentralJersey.com

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