The Most Profitable Dividend Strategy Is the Simplest
Investors have piled into funds offering variations on dividend investing, but one of the easiest methods has produced the highest return
By Spencer Jakab, The Wall Street Journal, May 9, 2025
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Dividing large capitalization, dividend-paying stocks into five buckets by yield is the first step. It isn’t the top group that one should buy, though, because those really could be dogs—sort of like Walgreens before its meltdown. Instead, buy the second-highest group of yielders…
Using information from Hartford Funds, a $1,000 investment in the S&P 500 or its predecessor made in 1930 would have grown into $8.6 million through last year. An investment in the second quintile of stocks by yield would have grown to $31 million… [end quote]
The top quintile of dividend yields could be companies that are potentially distributing too much to be stable.
I like this approach. Simple and boring but relatively safe.
Wendy