In the initial segment of this series, we explored the performance of dividend growth ETFs compared to the overall market in both the long term and throughout the Lost Decade (2000–2010). To reveal a key point: dividend growth investors fared better during challenging periods.
Now, let’s take a closer look at how dividend growth strategies fared during the 2008 financial crisis and the post-COVID period. We will finish with important takeaways to assist you in selecting a strategy that aligns with your needs.
**The 2008 Financial Crisis**
The global financial crisis of 2008 exposed vulnerabilities in the banking sector and illustrated the severity of bear markets.
Now, let’s evaluate the performance of our benchmark ETFs from January 2008 to 2015.
**U.S. Market vs. Dividend Growth (2008–2015)**
– **S&P 500 (SPY):** $100,000 increased to $163,000
– **Dividend Growth (VDIGX):** $100,000 increased to $179,000
**Canadian Market vs. Dividend Growth (2010–2015)**
– **TSX (XIU.TO):** $100,000 increased to $137,000
– **Dividend Growth (CDZ.TO):** $100,000 increased to $183,000
*CDZ’s data starts in 2010, so the comparison begins post-crisis.*
In spite of hurdles like U.S. government shutdowns, European debt crises, and market turmoil, dividend growth investors achieved superior results and experienced reduced drawdowns. This reliability is crucial for retirees or anyone depending on portfolio income. As illustrated during the Lost Decade, dividend-paying stocks not only rebounded—they took the lead.
**Since January 2020: COVID and the Recovery**
From 2020 to 2025, we underwent one of the most chaotic eras in market history, characterized by global lockdowns, a swift market recovery, soaring inflation, aggressive interest rate hikes, and a resurgence in technology.
**U.S. Market vs. Dividend Growth (2020–2025)**
– **S&P 500 (SPY):** $100,000 increased to $198,000
– **Dividend Growth (VDIGX):** $100,000 increased to $160,000
**Canadian Market vs. Dividend Growth (2020–2025)**
– **TSX (XIU.TO):** $100,000 increased to $182,000
– **Dividend Growth (CDZ.TO):** $100,000 increased to $160,000
This time, the index outshone, particularly in the U.S., propelled by major tech players. In Canada, the dividend ETF fell short of the TSX, likely due to exposure to sectors such as REITs, which faced challenges during the COVID downturn and recovery.
Nonetheless, dividend-oriented portfolios still posted robust double-digit gains with reduced volatility. For those prioritizing stability while building wealth, this is a significant advantage.
**Not Sure How to Start?**
Whether you’re holding onto cash or seeking to revitalize a portfolio, the DSR Investment Roadmap can provide clear guidance moving forward.
This complimentary guide addresses frequent questions for DIY investors:
– How many stocks should I possess?
– When is the optimal time to buy?
– Do I need to invest in every sector?
– What principles should direct my decisions?
– Which metrics truly matter?
Rather than relying on guesswork, adhere to a verified plan to construct (or reconstruct) a dividend growth portfolio that you can confidently trust—step by step.
**So, Who Wins?**
Key takeaways from this series:
**Dividend Growth Wins When:**
– The market is declining (e.g., 2000–2010, 2008 crisis)
– You emphasize consistency, reduced volatility, and income
– You appreciate owning businesses you comprehend and believe in
**The Market Index Wins When:**
– We are in a bull market (e.g., post-2009 tech surge, 2023+ recovery)
– You aim to maximize total returns
– You are comfortable with greater drawdowns and volatility
Dividend growth doesn’t consistently surpass the market but excels during periods of fear and low investor confidence.
For a portfolio you can maintain through market fluctuations, dividend growth offers a compelling edge.
**My Real-Life Results**
For tangible implementation of dividend growth strategies, I’ve shared my real-world experiences. Since 2017, I’ve managed my pension portfolio utilizing a disciplined dividend growth strategy, outperforming a 50/50 combination of XIU.TO and VFV.TO, with less volatility—even amidst occasional losing selections.
What ensured my success wasn’t solely about choosing winners; it was about remaining faithful to the process, which is the core principle of dividend growth investing.
Track my journey through monthly updates.
**The Final Word: Stay Invested**
The most important takeaway:
**No one who remained invested faced losses.**
Whether you opted for dividend stocks, the S&P 500, or a