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Seeking to Enhance Portfolio Returns with a High-Dividend Equity Strategy

Executive Summary

  • A sizeable portion of high-dividend equities’ return is in the form of cash. Therefore, dividend-paying stocks may help to cushion a portfolio’s downside when the broader market is posting losses.
  • Although high-dividend equity portfolios may underperform during strong growth markets, historically, dividend returns have been much more stable than price-only returns.
  • An allocation to international dividend-paying stocks offers a powerful combination of potentially higher yields and enhanced portfolio diversification.
  • Dividend-paying stocks, when included in hypothetical portfolios of various investor profiles, help to improve returns while generally lowering overall portfolio risk.
  • The key to dividend investing is capturing equities with dividend growth potential to outpace the effects of inflation.


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