Dividend returns account for a significant part of total returns especially over the long-term in many markets. So it is important to hold dividend-paying stocks in the portfolio. Even a small dividend yield can amplify returns die to the effect of compounding. How much do dividends contribute to performance? In this post lets take a …

Continue reading ‘Dividend Contribution to Total Returns: A Look at Three Regions’ »

The automobile industry is the second largest and most important to the U.S. economy after the real estate industry. During the global financial crisis auto sales declined with the recession. Since then the industry has picked up steam and continues to show strong growth year after after. The following chart shows the annual growth of …

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The performance of Cyclical stocks is directly related to the state of the economy.So if the economy is in contraction mode cyclicals do not perform well. But if the economy growing then they also grow. Cyclicals include the Industrial, Consumer Discretionary, Information Technology and Materials sectors. For example, during recessions restaurant companies will suffer as consumers …

Continue reading ‘Why Defensive Stocks are Great to Hold for all Market Conditions’ »

In an article in December last year I wrote why U.S. investors may want to diversify by holding foreign stocks. Quoting from that piece: For example, though the U.S. stocks have done very well in 2013 and this year, there is no guarantee they will continue to outperform other markets in the future. No country has been …

Continue reading ‘Can European Stocks Continue to Outperform their U.S. Peers?’ »