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” 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.
P.S. There’s still time to learn about my “No. 1 Value Stock for 2019.” Click here for access.