Focus on Total Return

Posted in: Stock Market, Thought of the Week

The “total return” for a stock consists of two components: capital appreciation (stock price increase) and income paid (dividends). In the last 70 years, dividends are responsible for over 50% of the “total return” in the stock market. Since the start of this bull run, investors are selling their dividend paying stocks that are considered to be defensive and moving these funds into riskier stocks in hope of higher returns.

Despite any short term weakness, our investment committee feels that the long-term investor should hold onto more dividend paying stocks and keep focused on total return instead of just stock price appreciation. Read this week’s Thought of the Week to see what you should be looking for in your dividend paying stocks.

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As an Investment Advisory Representative working in conjunction with Global Financial Private Capital (GFPC) we are provided weekly thoughts on what is happening in the economy and the market.  Written by our investment committee at GFPC we find these thoughts to be informative and interesting.

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