The Case for Dividends

I am a fan of stocks that consistently pay dividends, but even I was surprised by a chart (below) that I just ran across from iShares / BlackRock.  In an article on dividend-paying stocks in October 2010, there is a chart showing that the average dividend-paying stock in the S&P500 has massively out-performed the average S&P500 stock, going back to the early 1970’s.  It is also striking that this out-performance is a long-term phenomenon.  Even during the go-go 1990’s bull market for growth stocks and tech stocks, the cumulative out-performance of the dividend stocks held up.

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About Geoff Considine

After earning his Ph.D. in Atmospheric Science, Geoff worked for NASA for 3 years, leaving to become a quantitative analyst developing trading and portfolio management solutions for an energy trading firm. In 2000, Geoff became a consultant focusing on quantitative methods in portfolio management. Geoff founded Quantext in March 2002. Geoff has published commentary and analysis in a range of publications. Quantext is a strategic adviser to Folio Investing. Neither Quantext nor Geoff Considine is an investment advisor and nothing in any content provided by Geoff Considine shall be construed as advice.

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