MICHEL PIREU: Track record of rising dividends a good litmus test for investment decision
From September 1929 to June 1932 when the US stock market fell 81% on a real basis, real payouts fell only 11%
14 September 2020 - 16:56
In his book, The Future for Investors, Wharton Business School finance professor Jeremy Siegel gives investors concrete guidance about where to put their money if they are worried about a market downturn. Instead of relying solely on index funds, he suggests switching to companies with high dividend yields.
He then recommends reinvesting those dividends. Not only does that improve a portfolio’s long-term returns by buying in the downturns, it also reduces risk. First, because investors are more willing to hold on to regular cash-payers in the downturns, and second, because “dividends don’t lie”...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.