Dividends Are in a Rut

Dividends may be going through a rough patch, but income investors should exercise patience.

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(Image credit: Getty Images)

There is a doctrine that one year's investment champions become the subsequent year's failures. In 2023, this again is true, but the fallen heroes are unexpected: high-dividend-yield stocks and funds. The puzzle is whether dividend-focused strategies are set for years of relative decline, or if this is a case of massive short-term outperformance predictably returning to earth. I vote for the latter. 

The backdrop: In 2022, high-dividend shares, led by energy and utility stocks, were the stoutest line of defense, along with the Dogs, the highest-yielding listings in the broad averages or each industry sector. 

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.