U.S. Dividend Stocks Hold Their Own Vs. U.S. And International Stocks Overall

Includes: EZU, VEU, VT, VTI, VWO, VYM
by: Richard Shaw

Quality U.S. dividend stocks tended to lag in the rapid run-up from the 2009 bottom, but have been holding up comparatively well as broad stock indexes have begun to weaken recently. That behavior is consistent with the general idea that dividend stocks underperform in bulls and outperform in bears.

Slow but steady by comparison is the story of quality dividend stocks -- or maybe like the race between the tortoise and the hare -- boring by comparison to many stocks, but dependable in the long run.

Of course, in the midst of a sharp sell-off, everything may show up red on the screen, as correlations approach 1.00 for all securities.

In the long run, however, performance separates securities, and quality dividend stocks put in creditable performances, that are particularly important for retirees who may be as concerned about income and income growth as about capital gains.

Selling assets in a volatile market can be quite damaging to financial health, making securities that put regular cash payments in the pocket important for retirees.

The charts presented here are meant to provide a quick summary overview of relative performance of some major stock categories along with the relative performance of quality US dividend stocks.

Given the heightened anxiety in recent days due to Greece, the charts may help maintain overall perspective.

The 5-year monthly, 1-year weekly and 3-month daily charts below compare the percentage performance of dividend stocks (proxy: VYM) with the performance of the FTSE World Stocks index (symbol: $FAW, proxy not shown: VT), total US stocks (proxy: VTI), total non-US stocks (PROXY: VEU), EuroZone stocks (PROXY: EZU) and emerging markets stocks (proxy: VWO).

Figure 1: Five Years Monthly

Figure 2: One Year Weekly

Figure 3: Three Months Daily

Disclosure: QVM has no positions in any mentioned security as of the creation date of this article (May 14, 2012).

General Disclaimer: This article provides opinions and information, but does not contain recommendations or personal investment advice to any specific person for any particular purpose. Do your own research or obtain suitable personal advice. You are responsible for your own investment decisions. This article is presented subject to our full disclaimer found on the QVM site available here.