The facts about Market Truisms: High Dividend In this seventh part of a 9 part series we will be giving you the actual facts surrounding what are considered to be market truisms to help you become a better informed investor. Truism 7- High dividend paying companies provide low EPS growth and low capital growth. Fact- A study by Zhou and Ruland 2006 revealed that the high dividend high payout companies on average achieved higher growth. In his book “Irrational Exuberance”, Robert J Shiller used stock market data to show that over an average 30 year holding period, 69% of an investors ending account value came from dividends, 37% from capital appreciation and 4% from the original investment. In fact from 1925 to 2009, compounded dividends have accounted for approximately 44% of the S&P 500’s total return. It just proves the point that not only do you need to invest in quality businesses but you also need to be patient. At Newealth we are always looking to innovate and improve our ongoing services wherever possible and if you have any ideas or comments, please feel free to email me via ‘Contact Us’ at www.newealth.com.au or to call me on +61 2 9267 2322.
17th-February-2011 | 
