Stocks with dividends can play a significant long-term role in the impact of a diversified portfolio
Seasoned investors concur equities are an important asset
class in retirement portfolios. Therefore today’s article introduces four
stocks with dividends that could help long-term investors prepare for
retirement.
Michael Kitces of Buckingham Wealth Partners points out,
“For prospective retirees … determining how best to invest a retirement
portfolio to generate income is a substantial challenge.”
Academic studies and anecdotal evidence suggest that a large
number of individuals are afraid of eroding their capital and outliving their
assets in retirement. However, with a long-term approach to investing, most
market participants should be able to save a significant amount of money for
their golden years. And stocks with dividends could help in this process.
Research by Michael Clemens of BankInvest Group highlights,
“Dividend investing has historically outperformed both the broader market and
value investing, and at the same time shown lower risk. Dividend investing ‘overlap’
with both value investing and low-volatility investing, but is an independent
investment style of its own.”
Diversified buy-and-hold portfolios are likely to finish the
year with significant gains. Those who stayed in the markets in the spring were
rewarded handsomely. As I write, many stocks currently look poised to carry
positive momentum into 2021.
While growth, “new” economy and tech shares posted most of
the headlines in the past several months, stocks with dividends contributed to
portfolio returns. Although it is not possible to know what the new year may
bring, I expect passive-income seekers to continue to favor robust dividend
stocks.
Let’s now take a look at our four stocks with dividends that could help investors prepare for retirement:
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