FYI: What's a valuable way to assess the effectiveness of an investment strategy? By looking not only at how it performs when the market is up, but how it reacts to inevitable downturns. After all, markets are uncertain, and bull markets never run forever—so looking closely at how an investment does when markets shift can be a useful test.
With that in mind, we took a look at the S&P 500® Dividend Aristocrats® Index during the five worst downturns since its inception in 2005, and then looked at its subsequent performance when the market recovered. Why? Because the Dividend Aristocrats are an elite set of companies. To qualify for inclusion in this index, companies within the S&P 500 must demonstrate their ability not just to pay dividends, but grow these dividends consistently, every year, for at least 25 consecutive years. And while the minimum is 25 years, more than half of the Dividend Aristocrats have grown their dividends for more than 40 consecutive years, with 10 names having done so for more than half a century.
Regards,
Ted
