How We Beat the COVID Dividend Collapse
2020 has been a brutal year for dividends. According to asset management company Janus Henderson, global dividends declined by around 22% in the second quarter of the year, and that company expects a 17% to 24% decline across the year. That's a brutal and fast decline driven by the economic slowdown put in place to fight the COVID-19 pandemic, and it represents the worst decline in dividend income since the financial crisis.
Yet in our household, the dividends we've received have held remarkably steady overall and look as if they may actually increase a bit in 2020, bucking the global meltdown. To some extent, we got lucky -- coming into the year, we had no way of knowing just how awful things would be. It wasn't all just luck, however. Our dividend-paying investments have largely been tuned to focus on dividend quality as well as quantity, thanks to learning the painful lessons of the dot-com implosion and the financial crisis.
That focus on dividend quality provides a key driver of how we beat the COVID dividend collapse. While some of our holdings did see their dividends decline, those were offset by both stability and increases elsewhere and by directing our dividend reinvestment into companies that remained strong.
Source Fool.com
