The Importance of Dividends in a Low-Return Environment

    by John Snare

    Are financial planners and individual investors over-estimating the returns the U.S. stock market will produce over the next decade?

    Warren Buffett and other stock market experts continue to think so, even after 2003’s upsurge. They believe the market will produce returns that are well below the current long-term average return of the S&P 500.

    How should you invest your retirement savings in such a market environment? Examining the last extended low-return market—1965 to 1982—can help individual investors develop investment strategies and return assumptions to use in planning for this type of market environment.

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