Dow Jones Index Breaks Above All-Time High

By Dale Gillham | Published 18 November 2019

In this week’s US Stock Market Report, Dale discusses how the Dow Jones Index finally breaks above its previous all-time high. He also discusses a question from a subscriber about whether it’s good to invest in dividend yielding stocks.

I am often asked what are the best dividend yielding stocks and is investing for dividends the right way to go.

While a lot of people invest for dividends to receive an income, unfortunately too many hold on to stocks that are falling because they pay good dividends. So they forego capital growth to receive an income. But is this the right thing to do?

I constructed a list of the top 10 dividend paying stocks in the market right now, with the list in order of the highest paying dividend, which includes:

  • TripAdvisor, Inc.
  • Macerich Co.
  • L Brands, Inc.
  • Macy's, Inc.
  • CenturyLink, Inc.
  • Occidental Petroleum Corp.
  • Iron Mountain, Inc.
  • Helmerich & Payne, Inc.
  • Invesco Ltd.
  • Nielsen Holdings Plc

Let’s assume you placed $1,000 in each of these stocks on 1 January 2019, as at 15 November 2019 the portfolio would have generated a negative return of 12 percent excluding fees.

In other words, your $10,000 portfolio would have lost $1,243 with the biggest loss coming from Macy’s at -34.46 percent, and the biggest gain with Iron Mountain at 10.89 percent.

Contrary to what many people believe, stocks that pay high dividend yield are not necessarily good stocks to own. In fact, it can be a sign that a stock is falling away in price, so my advice is don’t just consider the dividend yield when selecting stocks, you need to be looking at investments that deliver both capital growth and income.

The Dow Jones Industrial Average has finally broken free of it recent sideways movement to make a new all-time high. In 2019 the Dow Jones has risen 20.05 percent, while the S&P 500 has risen 24.48 percent, and the Nasdaq 28.72 percent.

Interestingly, 229 stocks in the S&P 500 outperformed the return of the Index, with the highest gain being Advanced Micro Devices and Lam Research Corporation, which have both risen by 108 per cent so far this year. The year’s worst performers were Macys, down 43 percent and Trip Advisor down 42 percent.

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