The secret to long-term returns

The secret to long-term returns is … dividends. That’s the reminder today from Raymond James’ Chief Investment Strategist Jeffrey Saut, who, in a post on the company’s Investment Strategy page, also cautioned market participants not to get too bearish.

Saut notes that, since 1926, dividends have accounted for 4.5% of the market’s average total annualized return of 10.4%. He also cites reasons for possible optimism and offers a tantalizing list of dividend-paying stocks worth considering, several of which I either currently own (Realty Income (O: 33.03 -2.22%, yld: 5.09%)) or have sold puts against (NYSE Euronext (NYX: 29.17 -2.57%, yld: 4.01%), Aflac (AFL: 49.92 -2.00%, yld: 2.20%), and Home Depot (HD: 29.33 -1.74%, yld: 3.13%)) with a possibility of ultimately being put the shares at lower prices at some point.

Saut’s article is also available on Minyanville under the title “Jeff Saut: Making a Case for the Bulls.”