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
-
So, stocks are the place to go. But which stocks? While the market is clearly the place to go for strong returns, investors have different p...
-
Strange but true: seniors fear death less than running out of money in retirement. So what's a retiree to do? You could cut your expense...
-
Over the past few years, dozens of companies have recognized this cash flow conundrum. So in an effort to support their shareholders, some b...
-
If you're anticipating a long retirement, you'll want to remain invested in stocks to give your money a chance of outpacing inflatio...
-
One way to identify suitable candidates is to look for stocks with an average dividend yield of 3%, and positive average annual dividend gro...
-
Exxon Mobil Corporation (NYSE:XOM) stock is trading at the same level as it was during the beginning of 2019. Even with company-specific pos...
-
When writing this article, I was looking for an ideal list of dividend-paying stocks that consistently raise their dividends each year. In a...
-
A different approach is to focus on the payout. However, it’s important not to simply invest in companies that offer the largest payout. Tha...
-
As a new decade approaches, it's a good time to think about putting a few stocks in your portfolio that can stand the test of time, pote...
-
One of the Best Dividend Stocks of the Past Decade. If you ask most people to name the best dividend stocks, they’ll rattle off a similar li...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.