Dividend Stocks Versus Index Funds

Frequently on the radio, I hear financial advisers recommend index funds for investors. While that may work reasonably in a rising market, it has not done too well in a falling or even a static market. If you examine the performance of dividend stocks data sources like Value Line and Big Charts in recent years, you can see the advantage of dividend stocks over the index.

While this may look like hindsight, the performance of my wife’s portfolio — composed entirely of dividend-paying stocks — outperformed the Dow Jones Industrial Average and the Standard and Poor’s 500 index last year, in the previous five years and in the previous 10 years in spite of the dot-com crash and real estate slump.

Source: Dallas Morning News

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