Dividend Stocks be a Retirement Strategy

There has been a lot of research done on the impact of dividend investing versus non-dividend investing. According to a report from Lebel Harriman: “Dividend income has represented roughly one-third of the monthly total return on the Standard and Poor’s 500 since 1926. According to S&P, the portion of total return attributable to dividends has ranged from a high of 53 percent during the 1940s – in other words, more than half that decade’s return resulted from dividends – to a low of 14% during the 1990s, when investors tended to focus on growth. If dividends are reinvested, their impact over time becomes even more dramatic.

“S&P calculates that $1 invested in the Standard and Poor’s 500 in December 1929 would have grown to $57 over the following 75 years. However, when coupled with reinvested dividends, that same $1 investment would have resulted in $1,353. (Bear in mind that past performance is no guarantee of future results, and taxes were not factored into the calculations.)” Whether or not that’s true, there is a perception with dividend-paying stocks that they tend to be less volatile than stocks that don’t pay dividends, because they act as an extra cushion in falling markets.

Source: The Jerusalem Post

Related Articles:
- Dividend Stocks vs. a Safe Distribution Rate
- Best Stocks for 2011
- The 2011 Dividend Aristocrats
- 13 Dividend Stocks With A Good Yield/Growth Mix
- 11 Higher-Quality, High-Yield Dividend Stocks