Michel Pireu Columnist

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”.

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