Dividends really are the “Rodney Dangerfields” of the investing world—they get no respect!
But they should, because growing dividends are the key to thriving through any market.
And if you roll your dividends back into your portfolio, the power of compounding takes over and delivers the sort of growth that tech fanboys (and girls) can only dream of.
Here’s the proof, from our friends at Hartford Funds.
Hartford looked at the years between 1960 and the end of 2024, which included everything: the inflation of the ’70s, economic crashes in 2001 and 2008 and, of course, the pandemic.
Here’s what they found: if you’d put $10,000 in the S&P 500 in 1960, you would have had $982,072 at the end of the period, based solely on price gains.
That’s not bad: a 9,721% increase.
It shows you why most folks only think about share prices when they invest. After all, with a gain like that, it’s tough to get excited about a dividend that dribbles a few cents your way every quarter.
But here’s the thing: when you reinvest your dividends, the magic of compounding kicks in. The difference is shocking: your $10,000 would have grown to $6,399,429, or more than $5.4 million more than you’d have booked on price gains alone!
I’m sorry I’m not half as eloquent as Thomas D’Urfey. He had many fellow bubble sceptics too. Some were equally brilliant. It seems there was an entire industry in stock market bubble satire. Songs, artwork, prints, poetry, and more.
There isn’t much of that today. Curmudgeonly bubble sceptics stick to banging away at their keyboards, occasionally going on TV to be hounded by a panel of believers.
Sadly, the genius of the projectors matches that of their counterparts from 1720 quite well.
They promise profits from a venture, but focus more on the financial engineering than the business itself.
Soon, the speculation takes a momentum of its own. Few shareholders could tell you what the underlying business they own actually does.
Eventually, those who launched the enterprise walk away with money somehow. The slowest to sell are left holding the bag.
But I’d like to leave you with one last thought. An important one that is almost always missed.
Both the South Sea Bubble and the Mississippi Bubble were actually attempts to consolidate the government’s national debt. The speculative frenzy was part of this scheme, knowingly aided and abetted by the governments of the time.
Today, our governments are back in debt. Wild stock market frenzies are back. And financial engineering puts government bonds at the heart of the financial system, creating artificial demand for them.
If all you see is a stock market mania, you are being bubbled by the government.
What’s an investor to do in Huva world of bubbles?
There are several options.
You could join the latest frenzy in the hope that you buy and sell early enough.
You could invest outside the industries caught up in the latest bubble.
Or you could stick to sound, fundamental analysis of good companies that are steady performers.
How much you need to invest for £125 per month boost from ‘passive income’
Story by Jon King
Money earned with little to no effort from investors is said to be growing in popularity as Brits seek ways to supplement their incomes. Stocks paying dividends, bonds and savings accounts which pay a set interest rate are among the options available.
Hargreaves Lansdown says for many investors the appeal of earning from so-called “passive income” investments is “obvious”. The broker maintains that a regular income from investments could boost earnings, help with retirement plans or make a portfolio “work harder”.
It says that to earn about £125 per month would usually require a lump sum, but the size of lump sum would depend on the yield of a chosen investment.
Hal Cook, senior investment analyst, explains: “If the investment average yield is 3%, then an investor would need £50,000 to generate an annual income of £1,500 or monthly income of £125.
“The higher the average yield, the less an investor would need to invest to generate the same amount of income.
“If the average yield is 5%, then an investor would need only £30,000 for an annual income of £1,500. Yields are variable, and past performance isn’t a guide to the future.”
Mr Cook says investors can think of yield as similar to the interest rate on a savings account.
But he cautions that unlike cash savings, an investor could get back less than they invest as stock or bond markets can fall and rise in value, with no guarantees they will pay an income.
He explains that tax should be part of the consideration too, but savers can get around this with a tax-free Stocks and Shares ISA.
The analyst lists three possible funds, which he cautions will not be right for everyone. He urges Brits to invest only if a fund matches their aims, they understand the risks and the fund is part of a diverse portfolio.
Artemis High Income is the first fund listed by HL. This one invests mostly in bonds, but can also invest up to 20% in shares in the UK and Europe.
Mr Cook says: “A focus on high-yield bonds and shares that pay a dividend makes it a little different from most bond funds and a higher-risk option.
“So, the fund could be a good way to diversify a more conservative income portfolio, with the potential to increase the overall income paid.”
The second fund on HL’s list is Royal London Corporate Bond, which has a focus on investment grade bonds.
These are debt securities which have received a credit rating at or above a certain level from known rating agencies.
Mr Cook says this fund could form part of an income portfolio focused on the long term. He adds it could provide some bond exposure to a portfolio more focused on company shares.
Ninety One Diversified Income is the third fund listed by HL. Mr Cook says this one invests mainly in bonds from around the world, including government debt. It can invest in company shares too.
He adds: “We consider this fund to be a step up in risk from cash, with potential for losses, while providing a consistent income over time.”
We reveal the biggest investment trust discount changes over the past week.
14th August 2026
by Dave Baxter
Investment trusts offer a potential bargain thanks to their closed-ended structure. That happens when a trust’s share price is lower than the value of its underlying investments (the net asset value, or NAV).
However, a trust trading on a discount to NAV is not necessarily a buying opportunity. There’s likely a good reason why the trust is cheap, such as subdued short- or long-term performance, or poor investor sentiment towards it.
In this weekly series, interactive investor highlights the 10 biggest investment trust discount moves over the past week.
In total, nearly 400 investment trusts have been screened, with the data sourced from Morningstar. Venture Capital Trusts (VCTs) have been excluded. We also strip out trusts with less than £30 million in assets and those that are not available on the interactive investor platform.
Top Billing
Even the biggest discount increases of the last week have been fairly modest, something that might be down to the holiday season.
Investors in some of the featured trusts have nevertheless had some big news to digest.
It’s worth remembering that Ackman has already been busy in recent history, particularly in putting money into Magnificent Seven members such as Microsoft Corp MSFT
The trust’s board has been fighting a takeover attempt from its biggest shareholder, Glenstone REIT, and this week argued that a “negligible proportion” of AIRE shares had accepted a final offer from Glenstone.
The AIRE board believes that the offer “fundamentally undervalues” the company.
has seen its tiny discount advance slightly. The trust plans to absorb its underperforming rival Pacific Assets Ord if shareholders give their approval at a vote in September.
The merger, if approved, would involve a cash exit at a 2% discount to NAV for up to a quarter of the Pacific Assets shares.
The new, combined entity would come with some of the usual sweeteners, from increased scale to lower fees and a performance-related tender offer for up to 15% of shares if the trust missed a performance target over the five years to the end of 2030.
From 3i to renewables
Other names crop up in this week’s table without much big news. 3i Group Ord III
which has staged quite a recovery in recent months, sees its discount move back into double-digit territory, while two names from the troubled renewable energy infrastructure sector make the list. One of these, SDCL Efficiency Income Trust plc.
You know that the SAP 500 rises over time but not in a straight line.
You know that holding a share above the cloud means the sun may shine on your holding.
Below the cloud, it’s most probably raining on your parade, unless the share is reversing from a low.
Current yield 2.9%, if you buy from the chart in the late stage of a bull rally, you are likely to lose some of your hard earned.
Total interim dividends declared in respect of the period therefore amount to 7.30p per share, representing an increase of 45.1% compared with the corresponding period in 2025. The Board continues to believe that the enhanced dividend policy, which distributes 1.5% of the Company’s NAV each quarter, equivalent to approximately 6% of NAV annually, provides shareholders with an attractive and sustainable income level while enabling ongoing exposure to the breadth of the US equity market.
So not a yield of 7% but currently some profit could be booked and re-invested into a higher yielder.
You wanted to buy a share, the main criteria being a gently rising dividend, yielding 7% or greater, without too much risk to your hard earned.
7% is important as it doubles your income every ten years.
First check, how reliable is the dividend ?
You check back 5 years, a lot can change in 5 years, so recent history is more important than days of yore. A gently rising dividend.
7% is important as it doubles your income every ten years.
Mr. Market has given you a great opportunity as the yield historically was around 5%. If in time interest rates fall and the yield falls as the price rises, the yield could fall back to around 5%.
Compound growth on 10k of seed capital. The really good news is that if you only have a modest amount to invest, compound interest takes a few years to make a big difference to your Snowball.
Now PHP may not be traded in 30 years time, so you may have to switch horses but as long as your new Investment Trust or ETF, yields 7%, your yield on initial investment will be around 53%, why would you want to sell any of your shares ?
You need to check the dividend announcement 4 times a year and if the dividend is maintained or increased, you could re-invest the earned dividends back into PHP, until the yield falls below 7%.
You wanted to buy a share, the main criteria being a gently rising dividend, yielding 7% or greater, without too much risk to your hard earned.
7% is important as it doubles your income every ten years.
First check, how reliable is the dividend ?
You check back 5 years, a lot can change in 5 years, so recent history is more important than days of yore. There has been one miss, June 2021 but a gently rising dividend.
7% is important as it doubles your income every ten years.
Mr. Market has given you a great opportunity as the yield historically was around 5%. If you had been following SUPR you could have earned a yield of 9.3%, 2% compounded over 30 years makes a huge difference. If in time interest rates fall and the yield falls as the price rises, the yield could fall back to around 5%.
Compound growth on 10k of seed capital. The really good news is that if you only have a modest amount to invest, compound interest takes a few years to make a big difference to your Snowball.
Now SUPR may not be traded in 30 years time, so you may have to switch horses but as long as your new Investment Trust or ETF, yields 7%, your yield on initial investment will be around 53%, why would you want to sell any of your shares ?
You need to check the dividend announcement 4 times a year and if the dividend is maintained or increased, you could re-invest the earned dividends back into SUPR, until the yield falls below 7%.
