The Dividend Shield

Research Paper by Aaron Vinod John

The Dividend Shield: How Reinvested Dividends Shorten Recovery from Stock Market Crashes, 1871–2023 examines how reinvested dividends affect the time investors need to recover from major stock market crashes.

Using historical U.S. stock market data, the paper compares price recovery with total-return recovery, which accounts for reinvested dividends. It introduces the concept of the “Dividend Shield” to examine how dividends can help investors recover their purchasing power sooner after market downturns.

The research explores historical crash episodes and long-term investment periods to investigate the role of dividends in market recovery.

Read the paper on SSRN → https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7592778