The Fate Of These 49 'Dividend Aristocrats' Of The Early 1990s May Give You Nightmares

In my previous article, These 26 Dividend Aristocrats Won't Let You Sleep Well at Night I tracked the fate of the stocks that were S&P Dividend Aristocrats in 2007, to see how well they had held up through the Great Recession. Some readers felt that the large number of dropouts from that list was due to the unique circumstances of the Financial Crisis, which had a disproportionate effect on banks. From this they had drawn the conclusion that diversifying their portfolios should counteract the risk of any one sector doing badly.
I do my best to keep an open mind and prefer to base my investing decisions on verifiable facts. So this week I decided to see if this argument held up by taking a look at what happened over time to a different group of Dividend Aristocrat-like stocks, a group that was more diverse and whose performance could be tracked for a much longer time than the Dividend Aristocrats of 2007.
The Stocks that met the Dividend Aristocrat criteria in the early 1990s
Since the official S&P Dividend Aristocrat list was only launched in 2005, going back earlier in time requires some backtesting, We have all been warned that drawing conclusions based on backtesting is dangerous, but in this case we are not just looking at how the survivors that have made it unharmed to the present day have performed but instead at how all stocks that were in this class in the early 1990s performed over time.
Fortunately, it is possible to find online the list of stocks... Read more