Do You Know Where Your Dividends Come From?

If you think about it, a lot of long-term investors have exposure to the SPDR Trust (NYSE: SPY) , through a 401(k), a mutual fund, or our own investing portfolios. The SPDR Trust is an exchange-traded fund that tracks the S&P 500 and essentially allows investors to mirror the returns of the market while pocketing a current annual dividend of 1.7%. If you had asked me last week which sectors contributed the most to that dividend yield within the past decade, I would have assuredly answered the utility and financial sectors -- and I would have been brutally wrong! Here's where your dividends come fromIn actuality, as Barron's recently pointed out, out of the 10 major sectors within the past decade, financials have delivered the lowest overall yield at 1.01%. I would have been correct in predicting that utilities offered the highest yield at 3.84%, but given that they make up a mere 3.3% of the S&P 500 index, they have a much smaller than anticipated effect on its dividend yield.... Read more