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NO MATTER YOUR age or your approach to investing, there is one kind of investment that may be considered for your portfolio: dividend-paying stocks. While hardly the sexiest of investment choices, dividend-paying stocks may offer a difficult-to-beat combination — good quality and a history of typically lower volatility than the overall market. Wren cites an impressive number in this regard. During the past 80 years, about half of the market's growth, as measured by the S&P 500, has come from dividend-paying stocks. THE ESSENTIALS Some investors equate dividend-paying stocks with "blue-chip" stocks, but these terms are not always interchangeable. While there are some longstanding, bellwether firms that pay dividends, such as AT&T and Johnson & Johnson, any number of large, high-profile social media and tech companies pay no dividends. They might be regarded as blue chip based on performance and growth potential, but they are not dividend-paying stocks.. Not long ago, however, dividend-paying stocks drew little interest and almost no enthusiasm. From 1995 to the early 2000s, they fell out of favor while the focus was on the tech boom. After that boom went bust, many investors were risk-averse. But with traditional conservative investment vehicles such as CDs yielding miniscule returns, investors started looking again at dividend- paying stocks. With double-digit CD yields not likely coming back any time soon, the trend is likely to continue. It's important to note that CDs may o–er guarantees that are not available in stock investing. Investing in dividend-paying stocks involves the possible risk of principal. THE POTENTIAL BENEFITS While younger investors typically may be better served by looking for greater growth at higher risk, they also should consider having some dividend-paying stocks in their portfolio. The steady growth may have a payo– over time, especially if dividends are immediately reinvested in additional shares. For those approaching or in retirement, the scenario is a little di–erent, and the importance of having this type of asset in your portfolio may be greater. There's another quality, sometimes overlooked, of many dividend- paying stocks. A large number of corporations that pay dividends have significant interest and investment in emerging and global markets, which gives you additional exposure to that potential growth as well as the risk of these economies. The populace's aspirations to reach the middle class in many countries translates to the production of commodities such as better hygiene products, higher-quality food, more modern appliances, and other goods that enable a healthier and more productive lifestyle. Many of the name-brand, dividend-paying corporations consistently produce these kinds of goods. The potential drawbacks. Remember, however, that when interest rates rise, the returns of dividend-paying stocks could take a hit. And when the market experiences a big boom, these types of stocks do not always match the growth rate of other stock types. These are all reasons why it's important to maintain balance in your portfolio. Paul Guerra is the Managing Principal of Brookshire Wealth Management in Canton, Ohio. Visit brookshirewealth.com or email Guerra at pguerra@wfafinet.com for more information. ■ Dividend- paying Stocks: A Staple for Your Portfolio BY PAUL D. GUERRA NOTE: Investment products and services are o¢ered through Wells Fargo Advisors Financial Network , LLC ( W FA FN), Member SIPC. Brookshire Wealth Management is a separate entity from WFA FN. Wells Fargo Advisors does not provide legal or tax advice. Be sure to consult with your tax and legal advisors before taking any action that could have tax consequences. Please consult your legal advisors regarding your fiduciary duties. Wells Fargo Advisors Financial Network, LLC, Member SIPC, is a registered broker-dealer and a separate non-bank a™liate of Wells Fargo & Company. All investing involves risk including the possible loss of principal. There is no assurance any investment strategy will be successful. There is no guarantee that dividend- paying stocks will return more than the overall stock market. Dividends are not guaranteed and are subject to change or elimination. Generally, CDs may not be withdrawn prior to maturity. CDs are FDIC insured up to $250,000 per depositor per insured depository institution for each account ownership categor y. CDs may be issued by out of state institutions. United States-based corporations that have signifi- cant exposure to foreign and emerging economies may have their earnings impacted by factors such as currency fluctuation, political and economic instability, as well as di¢erent accounting rules for operations within those countries that other U.S. companies may not be subject to which can lead to additional price volatility. 3 2F I N A N C I A L P L A N N I N G