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Dividend payers - Portfolio selection (Backtest)

Dividend payers - Portfolio (Backtest 1996 - 2015)

If you want to build your own portfolio of selected US-stocks, you may want to focus on dividend-paying stocks in order to reduce the overall-risk! C-Average-Growth per year of this sample: 12.59% p.a. (10.18% per year after inflation)

Example Portfolio (Ralph Gollner sample, 1996 - 2015)
What could this mean to the Newbie in the Invesment world? To put this into perspective: Due to various reasons investors may only want to hold on to their initial portfolio (same stocks) or part of their holdings for a certain time period. Due to external influences (private circumstances; e.g. expensive SUV-purchase,...) people may feel forced to sell their stock-portfolio. What happens after a certain 3, or 5 years-holding period I have calculated in the following bar-diagram to give you a perspective for the period 1996 through 2015 (example "Portfolio 1" consisting of the same stocks as above):

Moreover, it may be extremely advantegous (as in the case of the sample-investor for "Portfolio 1") to concentrate on Dividend-stocks, most escpecially on companies with a proven track record in paying dividends. In conclusion - as an owner of the company - one is entitled to receive a part of the earnings on an annual basis. These payments (Dividend income) are paid out in cash, which you may re-invest in your already purchased stocks. In this manner the compounding interest effect is maximised. If you miss out on this exercise you will certainly regret it after 20 years (but only future will tell ;-).

2016-04-07 23:51:18