Last year was a wild ride for US investors, with domestic
equities hit by higher volatility coupled with a precipitous drop in prices in
the last quarter. A combination of factors including a deteriorating trade
relationship with China and impending rising interest rates have negatively
impacted the equity markets. Faced with increased uncertainty as they move into
the new year, investors might need to analyze their existing portfolio and
formulate new portfolio strategies to meet their financial goals for 2019.
Given this backdrop, investors may want to consider a
significant body of research suggesting stocks that have consistently grown
their dividends have historically outperformed all other categories of stocks.
Furthermore, the research team at Reality Shares found that companies with the
highest dividend growth rates have historically outperformed the S&P 500
even more, as shown in the figure below displaying the five year annualized
total percent return (relative to outperformance or underperformance of the
S&P 500) for different types of dividend growing stocks.
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