Dividend Stock Picks for the Next 5 Years

While stocks might look risky in the short-term, they offer the highest yield in the long-run, says Prof. Jeremy Siegel, from the University of Pennsylvania, Wharton School of Business. In his book Stocks for the Long-Run, Siegel suggests that the stocks offer more stable real returns than bonds in the long run, thanks to the mean reversion effect: Remarkable stability of long-term real returns is a characteristic of mean reversion, a property of a variable to offset its short-term fluctuations so as to produce far more stable long-term returns. Prof. Siegel is also a prominent investor who favors stocks paying substantial dividends. His research shows that the Dow-10 strategy, where one buys the top 10 dividend stocks in the Dow Jones 30 index, can beat the market with lower volatility. One can apply this strategy, or decide to create other valuation metrics. If you go with the second option, that... Read more