[Bobcuse]

Originally Posted by thevillagesinvesting

Be careful about chasing high dividends.

1) They are not a replacement for the safety of bonds.

Yes, bond yields are very low but since 1928, the S&P 500 has lost money about 28% of the time. The last 2 recessions, stocks have lost about 40% to 50% of their value.

Since 1952, the max 1 year loss for a high dividend strategy was -35%, max 2 year loss was -39% and max 3 year loss was -33%!

In 2008 recession:
- 40% VTI, 10% VXUS, 5% VWO, 45% BND = -18.35% return
- 50% Wellington and 50% Wellesley = -22%
- equal weight MO, GSK, T, BP, SO = -22.28%


2) High dividends are a relatively inefficient way to target value investing.

Be careful.

Good luck.

Thank you for these facts! This is exactly why I have been reluctant to keep my portfolio invested in the markets. High dividend % may be a result of lower stock prices so getting 5% return while the stock values drop is meaningless. If this market continues to be volatile when most believe it has peaked for the foreseeable future (12-18 mos) then I am reluctant to invest at this time. Annuities are tempting (I am 72) but I just can't get comfortable with that idea. I'm looking for a 5 year CD at a nice 3-4% return. That gets me zero risk and income to meet my needs. What is the best product available today with the low risk provided my CD's?