Injecting hope into UK equities: Short-term volatility worth the pain to reap long-term rewards

Vaccine roll-out raises hope for recovery

clock • 4 min read

For any UK investor reviewing 2020 and the falls seen in the FTSE All Share, and particularly dividend cuts, one’s attention naturally turns to the outlook for dividends from here and any lessons we may have learned.

One place to start is the recent past for clues about what the future may hold. Following the Global Financial Crisis (GFC) of 2008-09, dividends paid by FTSE All-Share constituents fell 21% from a peak in August 2008 to a trough in October 2009. The good news is that from the lows, the All Share Index's dividends rebounded 60% over the subsequent five years and surpassed their 2008 peak just four years later, in early 2012. Providing a stabilising impact: Dividends still matter even after pandemic blues Fast forward to today and the FTSE All-Share's dividend yield stood at 2.9% at...

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