Dividends Are the New Thing

At the end of last year, I was invited to participate in Bespoke’s Roundtable Q&A to discuss investing in 2010. For the question of what the major themes I saw, I said that investors would return to dividends.

Not a major theme, but I expect a new-found love for dividends. A company like GE could easily raise its dividend by 50%. I doubt many money managers will beat the SDY in 2010.

I think I stretched the point about GE’s dividend, although it could use some increasing. But my call on the SDY ETF (SDY) has held up fairly well. That ETF tries to match the S&P High Yield Dividend Aristocrats Index.
Here’s how it’s done versus the S&P 500 this year:

Through Friday, the SDY is up 4.80% for the year, and 5.71% including dividends.
In contract, the SPY is down -0.49% for the year, and down -0.02% including dividends.
Don’t dismiss buy-and-hold so easily. It depends what you buy…and what you hold.

Posted by Eddy Elfenbein on September 7th, 2010 at 1:42 pm

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