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Stocks with the highest dividend yields outperform the S&P 500 and beat inflation. Quality dividends, that is.
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Investors are too quick to shun dividend-paying stocks when inflation worsens. That’s because they’re focusing on too short of a time horizon. When measured over at least several years, dividends historically have done an admirable job of keeping up with inflation.
To illustrate how the short term can lead you astray here, contrast the Dow Jones Industrial Average’s DJIA real (inflation-adjusted) yield currently with where it stood at the beginning of 2021. At that time, the Dow’s nominal yield was 1.9% versus the U.S. Consumer…
