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☕️ Sunday Coffee: How Effective Is the MaxDividends Strategy for Building a Growing Passive Income?
Analyzing Detailed Historical Data and Research on Long-Term Performance
Max Dividends
July 26, 2024
MaxDividends Mission: Helping & Supporting Everyone in Building a Growing Passive Income, Retiring Early, and Living Off Dividends.
No one wants to work forever, and the question of financial security becomes more pressing. Can we really count on enjoying life after retiring, without having to find another job just to make ends meet?
Analyzing Detailed Historical Data and Research on Long-Term Performance
Recently, analysts at Hartford Funds, in collaboration with Ned Davis Research, updated their comprehensive study on dividend stocks, "The Power of Dividends: Past, Present, and Future."
This study examined the performance and volatility of dividend-paying stocks versus non-payers over a 50-year period (1973–2023).
Here’s what they found:
Non-dividend-paying stocks: Averaged a 4.27% annual return and were 18% more volatile than the S&P 500.
Dividend-paying stocks: Delivered a 9.17% average annual return and were 6% less volatile than the S&P 500.
Why Dividends Matter
Successful investing is about building wealth consistently and reliably—and dividend-paying companies are among the most dependable ways to achieve that. These companies are not only profitable but also transparent, rewarding their shareholders with real, recurring cash flow. Over time, they tend to grow in value, benefiting patient investors.
Before committing to any investment strategy, my team and I conducted extensive research on the best ways to invest in high-quality, dividend-paying stocks. Here’s why we believe this approach is a game changer:
Consistent, Predictable Income – Unlike stock price appreciation, which can be uncertain, dividends represent real profits paid directly to you. Whether monthly or quarterly, they provide a steady, reliable income stream—something you can count on.
Compounding for Long-Term Growth – Reinvesting your dividends allows you to buy more shares, which in turn generates even more dividends. Over time, this snowball effect accelerates your wealth-building process, creating a powerful engine for passive income.
Stability Over Speculation – Many investors chase high-growth stocks, hoping for price appreciation. But markets are unpredictable. Dividend stocks provide a built-in return, paying you regardless of short-term market fluctuations. This makes them an ideal choice for those seeking long-term financial security.
Investing in strong, dividend-paying companies isn’t just a strategy—it’s a proven path to financial independence. By focusing on businesses that reward shareholders consistently, you can build a growing passive income stream while enjoying greater stability and peace of mind in your portfolio.
“Anybody who invested in growth stocks last year, for instance, would have watched their investment go up, up , up, then come crashing back down in January. But dividends can't be clawed back, once they're paid out, that gain is permanent.”
An experienced but anonymous investor on Reddit
💡 How Effective Is the MaxDividends Strategy for Building a Growing Passive Income?
The Numbers Speak for Themselves
What can you expect from the MaxDividends Strategy? Let’s dive into the research:
Fact #1: Dividend Stability
91% of MaxDividends companies, on average, continue paying dividends without interruption 15+ years after purchase.
84% continue paying dividends without interruption 20+ years after purchase.
We conducted a 25-year analysis of both U.S. and global stock markets, focusing on the reliability of dividend payments from companies selected using the MaxDividends strategy.
The results confirm the power of investing in stable, dividend-paying businesses.
Holding Period | Companies That Stopped Paying Dividends (%)
2 years – 3.35%
5 years – 4.26%
7 years – 7.69%
10+ years – 8.47%
15+ years – 10.14%
20+ years – 17.35%
These numbers highlight the long-term resilience of dividend-paying companies selected using the MaxDividends strategy. Even after 20+ years, over 82% of companies continue rewarding investors with uninterrupted dividend payments.Fact #2: Growing Dividend Payments
96% of portfolios built using the MaxDividends Strategy paid more dividends in the following year compared to the purchase year—without any additional investments.
To test this, we analyzed 50 random 1-year periods from 1999 to 2024. For each period, we selected the Top 10 stocks based on the MaxDividends Strategy.
We then compared the dividends these companies paid at the time of purchase with the dividends they paid one year later.
The results? In all 50 cases, the dividend amount increased after one year—without reinvesting dividends.
This confirms the power of investing in companies with a strong dividend growth track record: your income naturally increases over time, creating a steadily growing passive income stream.
Consistent Dividend Growth – Even During Market Crashes
On average, dividend payments from MaxDividends stocks increased by 9.63% year-over-year.
That means if you started with $100 in dividends, the following year you would have $109.63—without any reinvestment.
How Did MaxDividends Stocks Perform During Market Crashes?
Even in times of major economic downturns, MaxDividends companies demonstrated exceptional resilience:
📉 2008 Recession (159 companies matched MaxDividends criteria):
147 increased dividends
11 maintained the same payments
1 cut dividends by ~15%
0 canceled dividends
📉 2015 Stock Market Selloff (137 companies matched MaxDividends criteria):
125 increased dividends
10 maintained the same payments
2 cut dividends by ~17%
0 canceled dividends
📉 2020 Coronavirus Crash (129 companies matched MaxDividends criteria):
117 increased dividends
12 maintained the same payments
0 cut dividends
0 canceled dividends
These numbers prove that even during severe market downturns, the vast majority of MaxDividends stocks continued paying—and even increasing—dividends.
This is the kind of reliability and financial security that makes dividend investing one of the most powerful wealth-building strategies.
Fact #3: Long-Term Performance
MaxDividends stocks consistently outperform the broader market over the long term: 11.32% vs. 9.91% for the overall market.
We conducted over 100 single-period tests and 250+ rolling tests to analyze the performance of the MaxDividends strategy.
1️⃣ We bought the top MaxDividends stocks, held them for a year, and reinvested the dividends.
Here’s what we found:
The average results of these tests are shown in the screenshot below. The MaxDividends reinvestment-adjusted return is +12.09% per year over a 20-year period, which is 2.18% higher than the overall market’s return during the same time frame.
This highlights how the MaxDividends strategy not only outperforms the broader market but also leverages the power of dividend reinvestment, helping to accelerate wealth accumulation over the long term.
2️⃣ In another test, we used the MaxDividends app strategy, purchasing the top MaxDividends stocks and only selling companies if they:
Stopped paying or raising dividends,
Became unprofitable or no longer showed growth potential.
We ran rolling tests across 65 different scenarios. Here’s what we found:
Average annual return: 11.32% vs. 9.91% for the broader market
Average Max Drawdown: -46.02% vs. -51.90% for the broader market
Portfolio average deviation: 14.82% vs. 14.99% for the broader market
These results demonstrate that the MaxDividends strategy not only delivers superior returns over time, but it also offers lower volatility and less risk exposure compared to the broader market.
By focusing on reliable, high-quality dividend stocks, investors can enjoy strong performance while minimizing downside risk.
Conclusion
Our comprehensive tests show that selecting reliable, high-dividend stocks can create a strong foundation for both capital growth and passive income. With the MaxDividends strategy, you can benefit from predictable, growing dividends and long-term stability.
MaxDividends Community
With MaxDividends Community you’ll always be part of a winning team and stop viewing the future as an uncertainty. Worry will fade, replaced by confidence and peace of mind. You’ll focus on doing what you love while your passive income continues to grow.
Choosing a strong environment is the key to achieving outstanding results. If you surround yourself with people who dream bigger than you, you increase your chances of reaching greater heights. Surround yourself only with those who will support you on your path to success.
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MaxDividends Mission
Help & support everyone on the way to build growing passive income, retire early and live off dividends.
Build your own dividend machine with MaxDividends to launch growing passive income, retire early and live off dividends with community like-minded
What You’ll Get by Joining MaxDividends Premium
The most important thing our MaxDividends community members value us for
Freedom & Independence
No boss, no schedules—complete control over your time. Ability to work on passion projects or simply enjoy life without financial stress.
Passive Income That Grows Over Time
Dividend-paying stocks provide a steady, rising income stream. Unlike traditional retirement funds, you don’t need to sell assets to cover expenses.
Protection Against Inflation
Dividend growth investing ensures your income keeps pace with inflation. Companies that increase payouts help maintain purchasing power.
Stress-Free Investing
No need for active trading or daily market monitoring. Long-term buy-and-hold strategy minimizes stress and decision fatigue.
More Time for Family & Personal Goals
Spend more time with loved ones instead of working 40+ hours a week. Pursue hobbies, travel, and personal development without financial pressure.
Health & Well-Being Benefits
Less work stress leads to better mental and physical health. More time for fitness, proper sleep, and healthier lifestyle choices.
Avoiding the Corporate Rat Race
Escape office politics, toxic work environments, and endless meetings. Focus on meaningful activities instead of chasing promotions and pay raises.
Living Life on Your Own Terms
Ability to relocate, slow travel, or move to a lower-cost-of-living area. No restrictions on how you spend your day—whether it's reading, volunteering, or building a new skill.
Leaving a Legacy
Build generational wealth and leave assets for your family. Teach the next generation financial independence by leading by example.
Financial Security & Peace of Mind
A well-built dividend portfolio provides stability even during economic downturns. No fear of outliving your savings—passive income keeps flowing.
Many who already joined say it’s the best financial decision they’ve ever made—because money becomes a tool for freedom, not a source of stress.
MaxDividends Community: What ELSE You’ll Get Here
+ Access to full list of Top Dividend Stocks updated weekly. Boost your passive income for living off dividends.
Unlock Top-notch dividend growth investment ideas and insights, handpicked to help you crush your financial goals, retire early and live off dividends.
Ready-to-go step by step weekly guide to achieving financial freedom.
Grab ready-made MaxDividends stock sets starting at $300, $500, or $1000 each week.
My personal MaxDividends portfolios and short list with all the changes and updates weekly.
Comprehensive tools to help you on the way retire early and live off dividends.
Community Like-Minded Access
Stay in touch with me and other MaxDividends followers. MaxDividends community chat of like-minded who wants to live off dividends and retire early. Discuss ideas, share insights, build plans and set goals. Support, motivation, like-minded - all in!
My personal life & business column where I share life moments, insights on stock investing, long-term investment philosophy, and intriguing thoughts to benefit you.
Following our vision of growing dividend income and staying true to our mission, we’re making progress every day to deliver more value to every partner who joins MaxDividends.
🟢 What ELSE You’ll Get
Top Dividend Ideas
Undervalued Dividend Lists
Undervalued Dividend Eagles (updated monthly) Undervalued Dividend Kings (updated monthly) Undervalued Dividend Aristocrats (updated monthly)
Dividend Insights
Top 5 MaxDividends Ideas of the Month Top 3 the Most Promising Dividend Ideas of the Week List of Dangerous Dividend Stocks (updated monthly)
🟢 And even MORE
The Best Dividend Tools in the World from MaxDividends Team
Dividend Screener: Find Your Own Hidden Gems
Dividend Portfolio Tracker: Take Under Control All Aspects of Your Passive Income
Dividend Checker: Check Financial and Dividend Score 19000+ companies worldwide
Someone's sitting in the shade today because someone planted a tree a long time ago.
FAQ
MaxDividends Mission: Help & Support Everyone On the Way of Building Passive Growing Income, Retire Early and Live off Dividends
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Thought I would share - I was able to create an Ultra High Dividend portfolio w/15 companies today that would net me a $4,200+/month income. I just retired this month and have a current income of $10,230/mo., will be $12,500/mo. in '27 so another $4200/mo. would be nice! Love the app, had a lot of fun creating a portfolio today!
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P/S
It’s often said that you get the partners you deserve. If that’s true, we consider the quality of our readers to be the best compliment we could hope for!
Thanks for all the support, and see you on the other side :)
If you have any questions, reach out to me on Email: [email protected]!
Best regards, Max.