Dividends Are Worthy

Why defend dividends? Dividend income has been one bright spot for American investors during the recent recession and the sluggish economic recovery. Stocks that pay dividends had a more stable performance in the market. Companies that continually raised their dividend not only have outperformed the broader index, but have done so with less risk.

Contrary to what many might say, dividend beneficiaries are far from just being wealthy Warren Buffet one-percenters. According to a recent Ernst & Young Report, 25.4 million tax returns included qualified dividends in 2009, representing $123.6 billion of qualified dividends (which are ordinary dividends that meet specific criteria to be taxed at the lower tax rate, currently 15%, rather than at higher tax rate for an individual’s ordinary income).

Source: Market Watch

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