Dividend Stocks Offer Protection Against Inflation: Canadian Example

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Dividend-paying stocks have many advantages over non-dividend payers. Dividend stocks only offer extra income but also offer protection against inflation. In many counties, dividend yields could match or exceed the inflation rates. In the following example, Canadian dividend equities offered income that met or exceeded inflation. From an article at RBC:

Income for protection against inflation

Dividend stocks distribute regular income, which can help investors meet their current spending needs. Fixed bond payments are also regular but tend to be more exposed to inflation than equities. This is because stocks may grow their dividends and realize capital appreciation (Figure 2), potentially making them better positioned to keep pace with, or exceed, inflation over the long term.

Source: A case for dividend investing, RBC Global Asset Management

Periodic Table of Annual Returns for Canadian Investors 2012 to 2022: Chart

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The Periodic Table of Annual Returns for Canadians has been updated for 2022 by Stingy Investor. This table shows the performance of various asset classes by year in Canadian dollars. The chart below shows the returns from 2012 to 2022. For earlier year returns click on the link and you can use the arrows to get historical data. Last year the TSX performed relatively better than the S&P 500 but still in the negative.

Source: Stingy Investor

Data Sources: Many thanks to Norbert Schlenker at Libra Investment Management for collecting the data that this calculator uses. Original public data sources include: Bank of Canada, BC Government Statistics, Canadian Institute of Actuaries, Economagic.com, Financial Post, Globe & Mail, globefund.com, Kitco, Libra Investment Management Inc., MSCI, Prof. Werner Antweiler (UBC), Scotia Capital, BMO, Standard & Poors, Statistics Canada (Table 326-0001), DH&A, and Wilshire Associates.

Related ETFs:

  • iShares MSCI Canada Index Fund (EWC)
  • SPDR S&P 500 ETF Trust (SPY)
  • SPDR Gold Trust (GLD)

Disclosure: No positions

Emerging Markets Returns by Year 2008 to 2022: Chart

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The Emerging Markets Annual Returns chart has been updated by Novel Investor with 2022 data. The worst performers last year were Hungary, Taiwan and Korea. Steep declines in the tech sector hurt Korea and Taiwan as they are heavily dependent on the sector. The top performer was Turkey followed by Chile and Brazil. Chile was crushed a while ago. So it is not surprising Chilean stocks had a relatively better run last year. With the election of Lulu, investors are betting on a revival of booming economy for Brazil and higher returns for Brazilian equities.

Click to enlarge

Source: Novel Investor

Related ETFs:

  • Market Vectors Russia ETF (RSX)
  • iShares MSCI Mexico Capped Investable Market (EWW)
  • iShares FTSE/Xinhua China 25 Index (FXI)
  • The iShares MSCI India ETF  (INDA)
  • iShares MSCI Brazil Index (EWZ)
  • iShares MSCI All Peru Capped Index (EPU)
  • Global X FTSE Colombia 20 ETF (GXG)

Disclosure: No Positions