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ClearBridge Advisors’ Michael Clarfeld argues that large-cap dividend-paying stocks are a great way to secure a portfolio.
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Thanks very much Jeff Flock Michael Clark felt.
Is a guy who has nearly 56 billion dollars in assets under management and he's going for big American dividend payers if you -- to sit there at a cocktail party and say.
Tell me what to buy that's what he'd say he's the managing director and portfolio manager of clear bridge advisors he's spending the last hour.
Of trading with us -- Michael what is the number one key to getting financial returns.
During what it's been several years.
Of real volatility an emotional crisis when it comes to the stock market.
Yeah that's a great question we've been trying to get people to folks on dividends.
Thank you go back historically over even a longer time period dividends have been in and generated about 40% of total returns the stock market.
The last ten or twelve years where the market's been completely flat dividends have been the only source of return.
And in a low rate environment like today we're interest rates very low and it's hard to find returns we did you can get an attractive portfolio dividends with a yield of over 3%.
Sort of what she -- coming out of the gate.
Regardless of what the market does you know you can guarantee that 3% -- showing your -- the Legg Mason equity income builder fund year to date up about 4% but over the past three years up 14%.
Q what is the one piece of philosophy that has helped you get that kind of -- think -- what we're really focused on is striking that balance between that the importance of the upfront yelled that dividend today.
They're really not losing sight of the growth dividends the power of dividends is the compound in hearing your -- that for really focus this parent dividend.
Awful and I asked that because it has become a -- on trade yeah it's funny my colleague has a great -- which is that there's no bubble and dividends that are bubbling coverage about dividends.
And -- it everywhere people blame the messenger yeah always -- eighty aggregate but not Fox Business I think but.
But there's a -- -- coverage on dividends but we think it's really just precisely because of how effective they are and we thinks it.
Far from being a bubble we think this is the beginning of a multi year investment thesis.
These kind of companies that we're focused on -- the large cap companies companies like.
And ExxonMobil are Procter & Gamble.
These are big companies big market caps and it'll take a long time before investors -- and distort the -- we can't ignore the fact that technology that -- has been the dividend -- that's finally pulled ahead of the pack -- used to be that growth stock story -- taking whatever money we make and putting it back into growing as companies but now there are good quality companies really paying a decent dividends -- -- yes which really been nice change for dividend investors historically we would have a tough time investing technology.
Because most these companies didn't pay dividends -- sort of seen as a paying a dividend intact and if you -- -- -- -- anymore but that's not the case.
Today we have companies like Microsoft Intel and apple which pay really significant dividends if companies like Oracle and Cisco which -- initiated smaller ones.
And we think that the stigma of being a dividend -- dip in technology is now gone.
And we expect them to it's sort of get more religion and become bigger -- of -- some of Michael's most widely held stocks in his fund.
Bristol-Myers Squibb Procter & Gamble HJ Heinz but he's going to name three I happen named coming up.
Why he likes them so much and why you feel that they can really give people some good returns set don't go away from us for now.
