Comments on: Dividends to the rescue in a “Great Depression”

By: investment-fiduciary

investment-fiduciary — Mon, 24 Aug 2009 12:59:28 +0000

Is it English?

By: Depression Effects

Depression Effects — Mon, 24 Aug 2009 07:46:51 +0000

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By: investment-scientist

investment-scientist — Thu, 12 Mar 2009 11:39:48 +0000

Diego,

A study by Robert Shiller of historical dividend changes during recessions discovers that overall dividend reduction is about 1/7 of price reduction. Still there bound to be some high dividend stocks cutting dividends by a huge percentage, the trick is to hold a well-diversified high-dividend index fund instead of single stock.

http://investmentscientist.com/2008/10/24/is-stock-price-volatility-justified-by-subsequent-changes-in-dividends/

By the way, prof. Shiller put the historical price and dividend data online, you can do the research yourself

http://www.econ.yale.edu/~shiller/data.htm

One final caveat, history may not repeat itself.

By: Diego Mamani

Diego Mamani — Thu, 12 Mar 2009 02:34:44 +0000

Michael, I like your columns very much. A problem I see with this topic of dividends coming to the resue during economic downturns, is that companies may cut dividends duringhard times, and they do so without warning. Just recently (Jan 2009) GE’s announced that the $1.24 dividend would not be cut. However, the follwoing month the dividend was cut to $0.40.

An ex-post analysis of high-dividend stocks doesn’t take into account the great uncertainty we face when deciding to buy dividend-paying stocks.

By: Recession and stock market performance « The Investment Scientist

Recession and stock market performance « The Investment Scientist — Mon, 09 Mar 2009 19:03:08 +0000

[...] strategy should stand up to the stress-test of the Great Depression. I studied the effect of dividends and the that of [...]

By: Complete list of high-dividend-yield ETFs - US « The Investment Scientist

Complete list of high-dividend-yield ETFs - US « The Investment Scientist — Wed, 11 Feb 2009 03:39:30 +0000

[...] Top Posts Yale Endowment asset classesAll-weather portfolio: how Yale and Harvard endowments invest for bad timesRecession and stock market performanceDavid Swensen gives four-point advice to individual investorsA David Swensen lecture on asset allocation, security selection and market timingComplete list of high-dividend-yield ETFs – USIs P/E ratio a useful stock valuation measure?Dividends to the rescue in a “Great Depression” [...]

By: When will the market hit bottom? « The Investment Scientist

When will the market hit bottom? « The Investment Scientist — Tue, 10 Feb 2009 16:30:59 +0000

[...] For the first 10 years of my hypothetical investment, dividends accounted for 80.4% of the total investment gain. This means that if I had invested in high dividend stocks, I would have done even better. (Also see my newsletter article, “Dividends to the rescue in a Great Depression“.) [...]