Why you should be seeking out UAE’s dividend-bearing stocks

Why you should be seeking out UAE’s dividend-bearing stocks

Why invest in dividend-yielding stocks? This has been one of the most asked questions in 2022, even as markets throughout the West sold off in dramatic fashion. There seems to be a continuing sense of belief in the resilience of Western equity markets (and even crypto) rather than what has been transpiring in the domestic and regional markets by many skeptics. The Efficient Market Hypothesis (EMH) asserts that markets are ‘efficient’, in that the only way an investor can achieve higher returns is to take on more risk. But this is not necessarily true in practice, as 2022 has shown. More importantly, research by Guggenheim Partners shows the least volatile decile of stocks generated annualized total returns of 8.7 per cent over the last 40 years, while the most volatile decile lost 8.8 per cent. This seems to flatly contradict the hypothesis; if we needed any reminder we have seen it with the performance of former ‘stars’ like Meta, Tesla, DropBox and Snapchat. Of course, in the background, the cost of capital has risen with interest rates continuing to rise. This brings into focus yet another study, conducted by Goldman Sachs which looked at the CROCI (cash return on cash