Dividends that grow are the nicest

The Ticker

November 07, 1997|By Julius Westheimer

Do you live on dividend income? Do you look forward to regular checks in the mailbox? The picture has been bleak.

Better Investing, November, says, "Dividends actually declined in the last 11 years, the span from 1985 through 1996 providing the lowest dividend average of any period since 1926. In 1996, the average Standard & Poor's 500 dividend income was only 2.5 percent, Dow Jones 1.9 percent, a record low."

BRIGHTER SIDE: If you buy stocks that raise their dividends substantially -- even if your initial return is low -- you will receive fatter checks every month, no matter how the stock market behaves. Examples, with percentage increases in the last decade: Bell Atlantic's dividend is up 54 percent; American Home Products' has climbed 93 percent; Bristol Myers' is up 117 HTC percent; Coca-Cola's is ahead by 238 percent; Merck's payout rose 490 percent; and Procter & Gamble's is up 164 percent.

RATHER GO ABROAD? "Since securities markets around the world don't follow the same price trends, adding non-U.S. investments to your portfolio may increase long-term return and lower risk," says Merrill Lynch's Client Commitment newsletter.

The letter gives these 10-year performance records of world equity markets: Korea, up 520 percent; Hong Kong, ahead 480 percent; Singapore, up 417 percent; Switzerland, up 218 percent, Japan, ahead 193 percent -- and U.S. stocks up only 192 percent. The United States was 12th in performance among worldwide equity markets. Only once in the last 25 years, in 1982, has the U.S. market ranked No. 1.

MARKET WATCH: From a torrent of post-crash comments, here are the ones I think make the most sense:

"This East Asian currency upset could be a catalyst for a well-deserved correction after many amazing advances around the globe." (Smith Barney's Interpretations.)

"A full-fledged correction is in place, but no bear market should be expected because the U.S. economy remains in excellent shape with plenty of cushion for shocks of this sort." (Allen Sinai, Primark Market Comment.)

"It's great to see all those arrows pointing up again." (Susie Gharab, TV anchorwoman, in The New Yorker, Nov. 10.)

"The Asian financial crisis will not do permanent damage to U.S. stock markets. Our economy is sound, with further gains in profits and jobs likely." (Rauscher Pierce Commentary.)

Pub Date: 11/07/97

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