May 5, 2016
These 5 Big Dividend Stocks Want to Pay You More Money in 2016
If you don't think of yourself as an "income investor," you'd better think again. That's because, long-term, dividends add up to an immense share of your portfolio's ability to generate total returns.
For instance, just over the last ten years, dividends have accounted for almost half of the S&P 500's performance, handing investors the difference between 57.5% gains and 95.9% gains when reinvested dividends are factored in. Put simply, ignore dividends at your own peril.
So even though the Fed still has its finger on the trigger for rate hikes in 2016 (a fact that's normally negative for big dividend paying stocks), keeping dividend exposure in your portfolio remains an important strategy right now. And it's only getting more important as the Fed prolongs its timeline for raising interest rates, driving more investors into the same income stocks that they were avoiding back at the start of the year.
To find the biggest benefit from dividends, it's not enough to simply buy names with big payouts today -- you've got to think about which names are going to be paying more tomorrow too.
So instead of chasing yield, we'll try to step in front of the next round of stock payout hikes...