High-Yield Dividend Stocks Big Winners For 2012

“Dividend stocks should simply be viewed as a slightly less risky form of stock investing,” adds Bianco. “As such, we should expect dividend-paying stocks to outperform during bear markets and underperform during bull markets.” He makes examples of two recent bear market periods and one bull market period where dividend stocks did just that. Between October 11, 2007 to March 6, 2009 dividend stocks returned -35.74% versus -46.10% for the S&P Equal Weight Index. From May 2, 2011 to Dec 21, 2011, on an annualized basis, dividend stocks returned -3.25% versus -13.81% for the S&P Equal Weight Index.

In the bull market between March 6, 2009 to May 2, 2011, dividend stocks returned 44.38% on an annualized basis, versus 56.64% for the S&P Equal Weight Index. “If investors are savvy enough to know which way the market was heading in general, why even bother distinguishing between dividend-paying stocks and non-dividend-paying stocks?”

Source: Kapitall

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