The last decade or so since the Great Recession has seen a bull run in US equities. Duh. We know this. But the bull run has traveled several paths in tandem.
Dividend bearing equities tended to do fairly well, ie., holding them and doing nothing made you noticeable money, but the massive multipliers were to be had in the stocks that grew independently of any dividend policy for the most part.
Strong, market-bucking gains in value were either in companies that produced massive profits like Apple, which produced enormous wealth from its lowly shares if you bought them on the cheap, or simply experienced multiple expansion like most of the NASDAQ and much of the S&P 500 regardless of their constituent dividend policies. I can think of a few dividend focused companies that have done better than the S&P in this time-frame assuming dividends were reinvested, but I can't think of any one of them that did better than Apple or Google on their own.
I am curious if anyone sees a return to dividends as characterizing stock investing in the future, as it characterized so much of it in the past for a very long time, or if anyone thinks they will continue to be considered an afterthought outside of alternative investment assets like equity REITs and others which are designed to pay them higher dividends in the first place.
I'm aware of most of the arguments surrounding dividends, both in favor and against their deployment. Tax drags, inefficient capital placement, keeping management honest, letting shareholders invest where they want to with profits, more neutral observations on how the markets reduce share price by an exact ratio... Many pros, many cons.
I am in favor of them personally. I think they'll make a comeback and will be more of a default position for aggressive investors rather than a position for more conservative people who only want to maintain purchasing power. What do you think?
Submitted June 04, 2022 at 12:37AM by ThemChecks https://ift.tt/efYQHB7
