Dividend-paying stocks, historically contributing a third of S&P 500 returns, are overlooked amid tech dominance and record-low yields.
The Vanguard Dividend Appreciation ETF (VIG) is drawing attention as investors overlook dividend-paying stocks in favor of tech and growth themes. Since the 1940s, dividends have accounted for roughly one-third of the S&P 500’s total return, though the index’s current yield stands at a record low of 1.05%.
Tech stocks have driven recent market gains, overshadowing traditional dividend strategies. However, dividend growers, particularly those with consistent payout increases, remain a viable long-term wealth-building approach. Historically, portfolios heavy in tech and growth stocks experience higher volatility and deeper drawdowns.
Investors often sell during market downturns, missing recoveries. Dividend-focused ETFs like VIG offer a defensive alternative, blending yield with growth potential.