Dividend stocks for bear markets/if you really wanna stay invested(?)
Dividend-paying stocks often come out ahead during a market sell-off. The majority of following stocks remained stable during the last sell-off periods (names given in text below, SPX stands for US-Benchmark S&P 500):
In 2008, when Standard & Poor’s 500-stock index nosedived 37%, the S&P 500 Dividend Aristocrats, an index of large companies that have raised their dividends every year for the past 25 years, surrendered a more tolerable 22%.
Some dividend stocks have a better record than others. At Kiplinger, they’ve identified nine such firms based on their performance during three hostile periods:
♦ the bursting-of-the-tech-bubble bear market, from 2000 to 2002, when the S&P 500 plunged 47.4%;
♦ the financial-crisis-related 2007-09 disaster, during which the index plummeted 55.3%;
♦ and the 2011 correction, a five-month period during which the S&P stumbled 18.6%, just shy of the 20% drop that typically defines a bear market.
These companies have products or services that consumers will pay for, even in a tough economy. [...] eight of the nine companies derive the bulk of their sales in the U.S., leaving them relatively insulated from the negative effects of a powerful dollar (when the greenback strengthens, overseas profits translate into fewer dollars).
The company names are (alphabetically):
Abott Lab., Cons. Edison, Clorox, General Mills, Hormel Foods, Mc Cormick, Ross Stores, Southern Co., Wal Mart
Down market dates are March 24, 2000, to October 9, 2002; October 9, 2007, to March 9, 2009; and April 29, 2011, to October 3, 2011.
source/elder article from January 2015: http://www.kiplinger.com