Dividend Stocks: Protect Your Portfolio During Economic Downturns

In a  recession, dividend stocks investing goes up. Stocks with a good history of dividend payments can become very enticing to yield-hungry buyers. Stocks such as these are well suited for people who are willing to invest, in order to get a return with little risk. Even when stocks are up, these still do typically well. This is because the yield of your investment goes up with the dividend and which then makes the share price higher.

Understanding the S&P 500

The S&P 500 is a value index that was officially published in 1957. It tracks the prices of 500 commonly traded stocks in the United Sates. Two of the largest American stock market companies that are included on the S&P 500 is NYSE and NASDAQ OMX. Aside from the Dow Jones, the S&P 500 is the most commonly followed index. The Dow Jones is just another index that tracks how public companies have traded on the stock market.

Boring Stocks, Exciting Return

They may not be a gamble and they may be boring but they will have you yawning all the way to the bank. Thanks to new tax laws, most dividends are only taxed at 15%. In 2008, dividend paying companies returned a little over 18%, which is a lot better than the exciting stocks of NASDAQ which only returned a little over 8%.