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Are Buybacks and Dividends Actually Propping Up Stocks?

Aaron Levitt Jun 27, 2019

You have to be impressed with the market over the last few years. We’re about to hit the record for the longest bull market in history and, since the depths of the Great Recession, the S&P 500 is up nearly 300%. And even though things have gotten a bit rocky lately, the gains seem to keep coming. For investors, this has been wonderful news.

The question is, what’s actually driving those returns? Earnings have been mixed and more recently have been trending lower. And for some analysts, the answer to why the market has been surging is clear – stock buybacks are propping up the market.

But is that actually a problem and should investors be worried? The growth in buybacks might not be as bad as it seems. It’s just another tool in the dividend hunters and investors’ playbooks.

Be sure to check out Dividend.com’s News section for next week’s Market Wrap and other great dividend investing news.

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