In my previous article I discussed the performance of the S&P Dividend Aristocrats.
We found that the list outperformed the S&P 500 index through good and bad years with a significantly lower volatility. The reality is that there is another list with dividend aristocrats generated by the S&P – it’s the High Yield Aristocrats list, which picks the 50 highest yielding stocks in the S&P 1500 index that have increased dividends for at least 25 consecutive years.
My only issues with this index are that it is not equally weighted and that it has been around for only two years or so. There is a tendency for equity research companies to back test past data in order to find an investment solution that could have worked perfectly through a procedure called data mining. It is a little bit suspicious that the index underperformed S&P 500 after it was launched. So if you are intrigued about buying stocks that have shown very good results in the past please remember the “past performance does not guarantee future results” disclaimer and always do your homework before you put your hard earned cash to work.