Finally, Table 4 presents a dividend strategy
It is currently lagging significantly behind the market. And most likely, it will not outperform the market in the future either. It has different goals - two of them.
First, it’s a good fit for people who live exclusively on income from their investments. They need a stable cash flow without having to sell their stocks. Dividends are one option (though taxes do take a bite out of them).
The second goal is portfolio balancing. If you have several portfolios built using AVI growth strategies, it makes sense to add a small portion of a portfolio built using the DIV strategy to reduce the volatility of your assets’ growth. During times of crisis, portfolios of dividend aristocrats often show growth. This reduces the volatility of an investor’s overall assets, allowing them to weather tough times with greater peace of mind.
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