As of January 2000, the dividend yield of the S&P 500 stood at an all-time low of 1.14%. A little more than a decade ago, it was 4%. Why the drop?
Stock prices have risen to the skies, but dividends have lagged behind as companies have found other uses for their extra cash. Many companies prefer to plow money into expansion, acquisitions, or share buybacks. That's fine with many investors, because dividends aren't tax-friendly: They count as ordinary income and are thus taxed at up to twice the rate of capital gains.
High Dividends = Good Defense >>