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Portfolio > Portfolio Construction

Boomers Should Invest In Dividend-Paying Value Stocks

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Boomers should bulk up on dividends and value stocks, Jon Chevreau writes on his blog, The Wealthy Boomer. According to a report by Catherine Avery Investment Management, a value-oriented portfolio is cheaper and safer than a growth portfolio, Chevreau writes, adding, “boomers have run out of time waiting for non-dividend paying growth stocks to give them capital gains.”

According to the report, boomers need dividends to stay on top of inflation. Chevreau cites a mock portfolio in the CAIM report where a $1,000 stock investment with a 3 percent annual dividend yield growing at 5 percent per year, and with a 5 percent annual appreciation in the stock price, grew 342 percent over 20 years. “That compares to 191 percent for the S&P500 index and just over 200 percent for Treasuries.”


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