Sophisticated investors know that even a little dividend income makes the difference between a miserable year in the market and a relatively easy recovery.
After all, stocks swing up and down with sentiment. However, when companies hand you a piece of the profit every three months, Wall Street‚??s shifting moods will never take it away. Even getting 2 percent of your investment back in a typical year makes the difference between losing money and breaking even 10 percent of the time.
Investors who capture that yield can wait longer for a stock market crash to play out before they need to liquidate. And if you need the income, the checks help pay the bills.
Unfortunately, the S&P 500 barely pays 1.9 percent a year. Even when the market was at its weakest, investors only got a chance to lock in a 2.2 percent yield.
That‚??s a problem because, as I said on Fox Business News yesterday, ‚??patience‚?Ě at the Federal Reserve gives inflation free reign to take a bigger bite out of your real investment returns.
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Save the Date:¬† I am speaking at TradersEXPO on March 12 and I want to invite you to¬†reserve your free seat¬†if you’re in the New York City area. Those of you who’ve attended any of my live sessions in the past know what it’s all about: the top trades on my radar, along with my up-to-the-minute thoughts on the macroeconomic environment and plenty of time for YOUR questions. I’d love to see you! Space is limited so now’s the time to¬†reserve your spot.
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