In the investment community, the Standard and Poors 500 Index (S&P 500) is the most common benchmark representing the stock market as a whole. This is why S&P 500 Index funds are a favorite among passive ETF investors. Unfortunately, the S&P 500 as a whole has a low dividend yield (only around 2%). Therefore, if you are an income investor who is counting on a reliable stream of dividend payments, the S&P 500's low yield might not be a good core holding for you.
However, if you sift through the index's 500 component stocks, you will notice that a number of them are high-yielding, consistent dividend payers. Furthermore, for the more risk-averse, there also a number of blue chips in the index with solid dividend yields. Dividends matter. After all, a dividend check can help investors sleep easily because it shows that the company has a stable capacity to make money. Best of all, the cash in your hand is proof that the earnings are really there, and you can reinvest or spend them as you see fit.
Source: Invesopedia
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