This show is a proud member of the Retirement Podcast Network.

Welcome to Stay Welfy Podcast. I'm your host, Taylor Schulte, and today I'm sharing part two

of our multi-part series on dividend investing. Specifically, in today's episode, I'm discussing

the long-term historical performance of dividend-focused strategies.

I'm also sharing three reasons why dividend investing historically has failed to outperform other major asset classes.

To grab the links and resources mentioned in today's episode, just head over to you staywealthy.com forward slash 218.

As shared in part one, the majority of publicly traded companies in the United States

pay a regular dividend. If an investor spends the dividends that they receive, the total value

of their portfolio will be smaller as a result. If the dividends are automatically reinvested, the total value of their portfolio will be smaller as a result.

If the dividends are automatically reinvested, the total value of the investor's portfolio

will remain unchanged on the day the dividend is paid.

And that's because the price of the stock or the price of the fund will typically be reduced

by the amount of the dividend.

If we simply compare spending the dividends

that you receive versus reinvesting them back into your portfolio, it should hopefully be clear

that reinvesting them will, of course, lead to more money in your pocket. If I don't need to

slice a birthday cake, I'll have more cake. If you don't spend your dividends,

you'll have more money. And to be extra clear, I'm not saying that high yielding dividend stocks or

funds lead to superior investment returns. In fact, historically, we've seen the opposite.

Dividend-focused stocks or funds over long periods of time have not produced the outperformance

that many investors are led to believe. And today, I'm going to explain why that is. Specifically,

I'm going to share three main reasons why dividend-focused strategies have underperformed. But before I

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