Читать книгу Get Rich with Dividends - Lichtenfeld Marc - Страница 10

Investing in dividend stocks is the best way to make money in the stock market over the long term.

But don't just take my word for it. Harvey Rubin and Carlos Spaht II, both of Louisiana State University in Shreveport, write, “For those investors who adopt ten and fifteen year time horizons, the dividend investment strategy will lead to financial independence for life. Regardless of the direction of the market, a constant and growing dividend is a never-ending income stream.”4

Just a few pages ago, I told you that dogma doesn't work, yet here I am sounding fairly dogmatic. The proof that dividend investing creates wealth is in the numbers.

First of all, investing in the stock market works. Since 1937, if you invested in the broad market index, you made money in 69 out of 76 rolling 10-year periods, for a 91 % win rate. That includes reinvesting dividends.

The seven 10-year periods that were losers ended in 1937, 1938, 1939, 1940, 1946, 2008, and 2009. The periods 1937 to 1940 and 1946 were tied to the Great Depression. The 10-year periods ending 1936 to 1940 were brutal with an average decline of 40 %. The decade ending in 1946 was much tamer with a loss of 11 %. The 2008 and 2009 10-year periods each lost 9 %.

Paul Asquith and David W. Mullins Jr. of Harvard University concluded that stocks that initiated a dividend and increased their dividends produced excess returns for shareholders. Additionally, the larger the first dividend payment and subsequent dividend raises, the larger the outperformance.5

And research shows that dividend stocks significantly outperform during market downturns.

Kathleen P. Fuller and Michael A. Goldstein of Babson College concluded, “Dividend-paying stocks outperform non-dividend-paying stocks by 1 to 2 % more per month in declining markets than in advancing markets.”6

In recessions, the outperformance is even more pronounced. During the recessions of 2001 and 2008, the Dividend Aristocrat index (more on Aristocrats in the next chapter) outperformed the S&P 500 by 6.45 percentage points annually, according to Albert Williams and Mitchell Miller of Nova Southeastern University.7

Later on in the book, I'll show you how you can achieve double-digit yields, which would nullify the effects of even the weakest historical markets performance and enable you to make money regardless of what the overall market is doing.