"The deepest sin against the human mind is to believe things without evidence."
-T.H. Huxley. Why are high-yield portfolios dismissed as inferior to their growth counterparts by so many investors? The lure of high-returns seems to always trump the steady growth of blue-chip dividend stocks in the mainstream media. Could it be that investors are taught that increasing dividend yields mean lower portfolio returns? Or that dividend payments mean that management believes the company is finished growing? Both couldn't be further from the truth.
Look no further than the oft-mentioned "Dogs of the Dow" to disprove the ill-informed opinion towards high-yield investing. The Dogs of the Dow is a simple, yet highly effective investment strategy that buys and holds equal dollar amounts of the 10 highest yielding dividend stocks in the Dow Jones Industrial Average (DIA). Investors buy into the high-yielding dividend stocks at the beginning of each year. They then adjust holdings annually to include the 10 highest yielding stocks in the Dow. Simple right? But more important than the strategy's simplicity are the overall returns. Over the last 25 years, the Dogs of the Dow have compounded at an annual rate of 18.0%. And this outperforms the Dow and the majority of money managers by a healthy margin.
Source: NASDAQ
Related Articles:
- 10 Dividend Stocks With A 10% Yield In 10 Years
- Free Cash Flow Payout vs. Dividend Payout
- 9 Dividend Stocks Trading at a Double-Digit Discount
- 6 High-Dividend, Low P/E Value Stocks
- How Much Money Will You Need Before Retiring?
Why Are You Ignoring These High-Dividend Stocks?
Posted by D4L | Tuesday, September 03, 2013 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
The best dividend stocks have one thing in common: resiliency. They can continue increasing their dividends even in the harshest economic en...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
A select group of monthly dividend stocks pays dividends at a rate of 10% or higher. Those are the ones on this list. Investors should be aw...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
How high is too high when it comes to dividend stocks? Of course, every income investor wants as much yield as possible. However, they also ...
-
When hunting for discounted investments, one excellent starting point is to look for businesses with dividend yields trading above their fiv...
-
Strange but true: seniors fear death less than running out of money in retirement. And unfortunately, even retirees who have built a nest eg...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.