Forget the S&P 500 — This Strategy Made 4x More
Why the “second-best” stocks win the race
If you want to understand how to build real wealth in the stock market…
You have to start by asking a simple question:
What doesn’t break?
Stocks fall.
Bonds freeze up.
Even gold and Bitcoin can go years without moving.
But dividends?
They just keep coming.
Every quarter.
Every year.
No matter what the market does.
Look at how the dividends from Our Portfolio have grown:
Dividends are the closest thing to certainty you’ll ever get in investing.
And that’s why when I heard Savita Subramanian - Head of U.S. Equity Strategy at Bank of America - explain her twist on a dividend strategy during an interview with Meb Faber, I took notice.
Savita isn’t some talking head. She’s been named one of Barron’s 100 Most Influential Women in U.S. Finance.
She doesn't chase memes.
She doesn’t time the Fed.
She builds smart models with real data.
And this one?
It’s shockingly simple.
Savita’s Simple Dividend Strategy
Here’s what she said…
Divide the Russell 1000 into five equal buckets - or “quintiles” - based on dividend yield.
Then buy the second-highest-yielding group - not the highest.
Why?
Because the top-yielding stocks are often distressed companies in freefall.
But the second tier?
Those are the strong businesses still priced reasonably.
Rebalance monthly, and over time, you’ll beat the market - with fewer losing years.
Let’s break that down…
The Secret’s in the Second Tier
You’re not buying the flashy names.
You’re not betting on tech miracles.
You’re not riding meme cycles or AI euphoria.
You’re buying consistent dividend-payers…
…that aren’t falling apart.
Savita’s strategy backtested beautifully. In fact, The Wall Street Journal looked into it using data from Hartford Funds.
Here’s what they found:
A $1,000 investment in the S&P 500 in 1930 would’ve grown to $8.6 million by 2023.
But that same $1,000, invested in the second quintile dividend stocks, would’ve grown to $31 million.
That’s nearly 4x more.
And the best part?
This group had the lowest percentage of negative years of all quintiles.
That’s huge.
Most investors are obsessed with upside.
But real wealth comes from avoiding downside.
Keeping losses small. Letting dividends pile up.
Today’s Second Quintile: 124 Stocks. $10,600. 3.35% Yield.
We screened the Russell 1000 using Savita’s method.
There are 124 companies in the second quintile.
If you bought just one share of each, you’d spend about $10,600.
Your portfolio would pay you $355 a year in dividends - a yield of 3.35%.
And here’s what you get in return:
A diversified basket of businesses
No “high-yield” landmines
Reliable, growing income streams
A strategy that’s quietly beaten the market for 90+ years
We’ve put the full list of 124 companies into a spreadsheet.
Click the button below to access it:
This isn’t just theory. This is history-backed, data-proven, real-world compounding.
And here’s the kicker…
Out of those 124 names, I’ve found seven companies that stand out.
Each one is a dividend compounding machine that passes the Chowder Rule.
They’re doing something right - quietly and consistently - that most investors are missing.
One of them is returning capital to shareholders at such a high rate, you’d think they were shrinking the company.
They’re not.
They’re just printing cash.
Another? It’s been increasing its dividend like clockwork for 25 years…
…yet trades for less than 18x earnings.
These aren’t hype stocks.
They’re income engines.
And they’re exactly the kind of business that make this strategy tick.
I’ll show you all five — plus a breakdown of what makes them special — but only for premium subscribers.
If you’re not yet a paid member of Compounding Dividends, now’s the time to consider it.
Because once you understand what makes these businesses tick…
…you might never look at dividend investing the same way again.
(And start collecting more income — with less risk.)