With the stock market now entering its ninth year of an epic bull run, and share prices at all-time highs, many investors are worried that dividend stocks, growth stocks — all stocks! — are trading at highly overvalued levels and set for a market crash.
While corrections are inevitable, at the same time history shows us that market timing is the absolute worst thing you can do. In fact, a recent study found that missing just 10 of the best market days in each of the past nine decades would have reduced one’s profits (owning the S&P 500) from 10,055% to just 38%!
In other words, trying to time the market can cripple your returns.
Long-term, buy-and-hold investing in dividend stocks is a great way to build your wealth and income, whether you want to simply live off dividends in retirement or some other life goal.
While the market’s valuation appears high relative to history, interest rates are also at very low levels — even after the Fed’s recent fed funds rate hike — making dividend stocks more attractive. It’s also true that no matter how high the market gets, something is on sale. Reasonably priced stocks with below average volatility also tend to decline less during market down periods, preserving capital.
Essentially, if you buy fairly priced, high-quality, low-volatility dividend growth stocks, such as dividend aristocrats, you can protect yourself from unpredictable market risk.
To help get you started, here are 10 great, safe dividend stocks to consider for your diversified dividend growth portfolio in the event of a market crash. We used our Dividend Safety Scores to identify many of these candidates. In order of yield …