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Prediction: 5 Dividend Stocks That Could Crush the S&P 500 Over the Next 10 Years
Want an easy dividend strategy to beat the market? This could be exactly what you're looking for.
Do you want to succeed in the stock market? Then I've got good news and bad news for you today. A column in The Wall Street Journal recently described a theoretically simple way to crush S&P 500 annual returns -- although that could be a lot harder than it looks in practice. (But don't fret.)
The idea goes like this. Historically, if you invest in a basic index mutual fund or exchange-traded fund (ETF) that tracks the S&P 500 -- such as the Vanguard S&P 500 Index ETF -- you can expect to earn around a 10% annual profit before inflation. That's a great number, and more than you'll make investing in bonds or earning interest on your bank account.
But according to this theory, you can do even better than the average S&P 500 returns with one simple trick: investing only in dividend stocks. And more specifically, investing in dividend stocks that pay almost, but not quite, the best dividend yields.
