Despite the surge in equity prices since the stock market low in 2009, investors can still pick up names with bond-like yields and the potential upside that equity ownership provides. Dividend yields, despite how insignificant they may seem, are a major component of equity returns as times goes on. It is estimated that nearly 50% of the S&P 500 historical returns are due to dividends.
Time is your friend as an investor. Consider a $100,000 investment for 15 years. At 10%, that original amount is worth nearly $418,000. But if you can earn 12% per year instead, you now have $547,000. That 2% difference led to an investment difference of over 25%. So dividends are not insignificant.
Source: Investopedia
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Posted by D4L | Saturday, October 08, 2011 | ArticleLinks | 0 comments »________________________________________________________________
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