These Dividend-Paying, 'Recession-Proof,' 'Bond Substitute' Stocks Are Underperforming

Last year, investing for dividends seemed to be all the rage. I read and heard a lot about investors substituting bonds with the stocks of companies expected to be 'recession proof' or companies that would supposedly pay out ever-higher amounts in dividends. At the same time, it was often argued that because investors would be purchasing stocks instead of bonds, the amount invested would surely grow over time as the stock market does what history says it must do: Go higher. As the stock market goes higher over time, dragging along the popular dividend-paying, 'recession proof' stocks, investors would have ever-growing unrealized capital gains on their equity positions. Furthermore, companies would continue raising dividends, thereby sending investors' yield on cost to untold heights.

Yes, this was the story the pundits told over and over last year. Apparently, this panacea for the low yield environment we live in today is right