Dividend signal

Indeed, the evidence shows that market
gains in recent years have been propped up by
unsustainable expectations of future dividends,
and there are signs that 2018 could be the year
the trend finally turns.

The dividend aristocrats
provide a useful illustration. These are a
selection of about 50 stocks which have a strong
history of paying increasing and reliable
dividends. These stocks matter as they comprise
about one-fifth of the total market value of the
S&P 500 and their post-crisis bull run has been a
signifcant contributor to the overall
stockmarket’s return.

Indeed, since the crisis,
they have outperformed the S&P 500 by
one-fifth.