Dividends4Life: High Yield Stocks Are Critical For A Successful Retirement

Capital appreciation since the market crash in 2000 has been inconsistent. The Dow Jones Industrials sold off sharply twice in the last 12 years with limited net appreciation in that period. About 10 years ago I recommended to my friend to buy Coca-Cola (KO), another Dividend Aristocrat, and she caught its low price. Since then the stock has doubled (plus dividends). That was an unusually good investment in the last decade. Others who did not buy at the low have not done so well because appreciation with quality companies has been more difficult than in the past. Meanwhile dividends continued and increased for these companies. Annual dividend increases have become a way of life for them.

Past goals of earning 10% on retirement money may be overly optimistic with an unreliable stock market. Most appreciation came from capital gains. Professional pension fund managers are not that optimistic. Receiving rising dividends before and during retirement feels good and that should continue independent of stock market gyrations. And a stream of increasing dividends can bring higher stock prices, the primary goal for successful retirement investing.

Source: Seeking Alpha

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