The low-interest-rate environment we’ve been experiencing for six years now has led to the increased popularity of high-dividend investment strategies. But the popularity of a strategy, however, can sow the seeds of poor future returns.
This occurs because cash flows impact valuations, and valuations are the best predictor of future returns. Given the growing popularity of high-dividend strategies, and the increased cash flows associated with that growth, I thought it worthwhile to do some research into how relative valuations have changed over time.
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