The average dividend mutual fund has outperformed the S&P 500 in the past 15 years. Their holdings pay out significant portions of earnings, which can help limit their stocks' decline during bear markets. Thus the average dividend mutual fund would have turned an investment of $10,000 on March 31, 2000, into $25,515 by May 19 this year, according to Morningstar Inc. data. The S&P 500 would have turned the same investment into $18,989. But dividend funds can lag during bull phases of the stock market, when growth companies that pay little or no dividends get rewarded for plowing earnings back into productive businesses.
Mutual funds pay out to their shareholders virtually all of the dividends collected from fund holdings. So that makes many dividend funds a possible source of income for investors, particularly those in retirement plans. So in addition to providing diversification for a portfolio and minimizing volatility, dividends can be a source of income. In fact, investors disappointed with low bond yields in recent years, can find better opportunities in dividend funds. Investors can choose to have funds' dividend distributions sent to them or their cash accounts, or they can choose to reinvest the payouts back into their funds.
Source: Investors.com
Related Articles:
- Why Dividends Matter
- 6 Stocks Currently Trading Below their Fair Value
- The Perfect Dividend Stock
- Bonds Look Morbid When Compared To These Dividend Stocks
- My 5 Largest Dividend Stock Positions Have Double-Digit Lifetime Returns
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Showing resilience during a tough week was a group of stocks that has not been heard from much in the past two years. A group that has been ...
-
For long-term performance, investors should consider pivoting their portfolios toward stocks that deliver high and growing dividend payouts,...
-
Dividend investors often get stuck with popular names in their portfolio, perhaps because these stocks are so often talked about that there&...
-
Anxiety over the European debt crisis and distrust in the markets drove volatility in global stock markets to dizzying heights in 2011. The ...
-
Talk to the average financial advisor, and they’ll say there’s no way to earn a safe 12% yield on your investment these days. After all, ban...
-
Dividend payers have long had a reputation as stodgy companies that can pay a reliable income but whose stocks don't move too fast. Here...
-
By any measure the stock market is overbought. With yields still at historic lows despite the increases in the federal funds rate, and the p...
-
This company has great opportunities in their preferred shares for yield hunters. It recently dropped from a buy to a hold. However, on the ...
-
As regular readers know, cash cows constitute mature businesses. Because they have little in the way of growth prospects, these firms pay ou...
-
Buying and holding great dividend stocks is a fantastic way for patient investors to achieve outsize returns over the long run. But not ever...
0 comments
Post a Comment
Post a Comment