Investing Through the Fourth Turning

If you aren’t sure how all those fit together, then welcome to 2026. We are all stuck in this craziness and can only make the best of it.

The Middle East has moved from simmering tension to a live, kinetic war with no clear off‑ramp. China’s discounted supply lines are getting squeezed. Japan's bond market is cracking and the US housing market just logged some of its weakest demand readings on record.

And somewhere in the middle of all this, McDonald's is paying its dividend. Again.

Positioning in a Global Reordering

I’ve been writing about cycles for a long time now. The Fourth Turning, the debt supercycle, sandpiles, and recently fingers of instability. Longtime readers have heard me build that case. I’m still building it.

But all the theory in the world doesn’t help us much if we don’t answer the real question in front of us: how do we manage our money, not to mention our life and family, when there are multiple plausible paths ahead and none of them look like the last 10–15 years?

I keep telling people I’m an optimist, but I’m a rational optimist. If we do get a true epic crisis, the first goal is simply to get as much of today’s buying power as possible to the other side.

The second goal is to be positioned to profit from it. We want to own businesses that don’t need a favorable macro backdrop to pay us. Businesses that generate real cash.

You can’t fake a dividend for long. The market is a very efficient lie detector when it comes to that.

It doesn’t matter where we are in any cycle. High growth or low growth. High inflation or low inflation. Political stability or radical change. Dividend growth works across regimes because it turns volatility into a rising income stream instead of a roller‑coaster of hope and regret.

In Taleb’s language, that’s the essence of something antifragile: not just durable, but actually getting stronger under stress.

That is what I want more of in my own portfolio as this global sandpile gets closer to critical.

The Research is Clear (and Uncomfortable)

Over the long run, the S&P 500 has delivered about 10–10.5% per year with dividends reinvested. Strip out dividends and you’re closer to 6.5%. ¹

Over the long run, dividends and their reinvestment turn a few hundred into nearly ten thousand.

Since 1930, the S&P 500 price index rose to 278, but the total‑return index with dividends reinvested reached 9,584. More than thirty times higher.²

I’ve long been in the “never short America” camp, as Warren Buffett likes to say. But let’s be honest: if we ignore dividends, the great American bull market is a 6–7% story, not a 10% story.

We can love America and still miss a huge chunk of America’s return horsepower by ignoring dividends.

It is also entirely possible for markets to move sideways for long stretches during periods of major change. ³

As Cory Mitchell’s long‑term S&P 500 chart shows, we’ve had multiple 10‑ to 20‑year stretches where the index chops sideways — from the early data in the late 1800s, through the mid‑20th‑century and stagflation 1970s bears.

And again after 2000, periods when dividends did almost all the compounding. 

In those long, flat “everything changes” decades, mid‑single‑digit dividend growth is the difference between going nowhere and coming out the other side ahead.

Investing Through Cycles

If you look closely, the market’s long sideways stretches don’t appear at random.

The early‑1900s, 1930s–40s, 1966–1982, and 2000–2012 periods of flatness line up with the same crisis windows flagged by Peter Turchin’s structural‑demographic work (instability peaks around 1920, 1970, 2020). Strauss–Howe’s Fourth Turning framework (crisis eras like 1929–1946 and the current one starting in the mid‑2000s).

When those cycles converge, the timing is never perfect, but markets often go sideways.

What always breaks during a “cycle collision” is the thing investors thought was safest and most reliable. While cash‑paying, durable, dividend-paying businesses keep grinding through it.

In the late 1920s it was growth stocks on margin, and anything tied to radios, autos, or utilities.

In 1972 it was the Nifty Fifty; in 1999 it was dot‑coms; in 2026 it’s AI and mega‑cap narratives.

The common pattern is that the story changes, but the winners look the same: cash‑rich companies that keep raising their dividends while the world goes crazy.

One Last Thing, I Mean It This Time

McDonald's went public in 1965. Since then, the total return, price plus dividends, has been in the hundreds of thousands of percent.

Since 2009 alone, both the stock price and the dividend per share have more than tripled, moving higher almost in lockstep.

The price appreciation has mirrored the dividend appreciation almost exactly. Through oil shocks. Through recessions. Through a global pandemic. Through whatever you’d call right now.

The world reorders. It always has. The question is never whether turbulence is coming; it’s whether we’re on the right side of it.

My hope is that this helps you think differently about where your returns will come from in a decade of wars, supply‑chain shocks, and policy blunders.

Your refocusing on essential income analyst,  

John Mauldin

^[1] https://tradethatswing.com/average-historical-stock-market-returns-for-sp-500-5-year-up-to-150-year-averages/     

^[2] https://www.spglobal.com/spdji/en/documents/research/research-sp500-dividend-aristocrats.pdf 

^[3] https://tradethatswing.com/average-historical-stock-market-returns-for-sp-500-5-year-up-to-150-year-averages/   

Dividends, Turbulence, and First Principles

In my last note, I wrote about what it feels like to live through a “year of living dangerously.” Wars with no clear exit. Supply chains being rewired. Bond and housing markets flashing signals we haven’t seen in years.

When environments shift this fast, I find it useful to strip away the forecasts and clever models and go back to first principles.

• What actually gets our buying power to the other side of a crisis or Fourth Turning?

• Who can we trust to keep paying us when conditions change?

• What’s truly reliable when it’s clear many stocks are not?

At the end of the day, the purpose of owning a business is to see cash returned to its owners over time, steady, reliable installments to the people who own it.

I want more of that kind. I care a lot less about what the market thinks my shares are worth this week than about how much cash those shares can reliably send back to me over the next decade.

The World Changed Quietly

For much of the 20th century, dividend income was easy to find. Our parents or grandparents could buy a handful of blue chips, collect 4–7% yields, and let time do most of the work. The income itself did a large share of the compounding.

Beginning in the 1980s (and accelerating through the zero‑rate era) those yields quietly fell.

Today we live in something much closer to a “yield desert.” The S&P 500 still pays dividends, but the starting income from simply owning the index is far lower than it was for most of the last century. ¹

In other words, the problem today isn’t whether dividends matter.

It’s that “own the index and clip coupons” is no longer an income plan. You have to be much more deliberate about the businesses you own.

Dividend Companies in Turbulent Markets

Companies that consistently grow their dividends tend to share some unglamorous traits: steady earnings growth, healthier balance sheets, and management teams disciplined enough to keep sending cash back to shareholders instead of chasing every new fad.

Historically, those companies have behaved differently in the market as well. Over long stretches, dividend growers and initiators have delivered higher returns with less volatility than companies that never pay, keep payouts flat, or frequently cut them.

Let’s just say they tended to behave better in rough markets.

We’re not just buying income; we’re buying a pattern of resilience.²

If We Hit an Actual Recession

When you zoom in on real recessions, the pattern is just as striking.

Since World War II, across 11 recessions and bear markets, the S&P 500 index has typically fallen more than 30% from peak to trough, while the dividends paid by those same S&P 500 companies barely moved—on a smoothed basis, cuts averaged only about 2%.

That doesn’t make the S&P’s dividend great as an income strategy; the yield is low and the growth uneven.

What it does show is the underlying point I care about: even a plain‑vanilla dividend stream has historically held up far better than prices when the economy hits the ditch.

Over full cycles, most of the stock market’s total return has come from dividends and their reinvestment, not from heroic price moves.

I’d rather have an income engine I can see and measure than depend on the market to be generous with multiples in a decade that’s likely to be anything but.

Around here, we’ve been spending a lot of time thinking about how to build portfolios around those principles in the years ahead.

Your reinvesting in first principles analyst,

John Mauldin

^[1] https://www.gurufocus.com/economic_indicators/150/sp-500-dividend-yield

^[2] https://www.nuveen.com/en-us/insights/equities/why-dividend-growth      

In This Market, No Place to Hide

Kelly Green here,

There’s a kind of unease that doesn’t come from markets crashing—but from never quite knowing if they will. That’s the 2020s so far. Not a clean bear we can brace for, not a clean bull we can ride. A grind. Indexes lurch higher, then give it back.

Lately, they’ve been giving more back as AI headlines swing between euphoria and panic—layered on top of very real concerns about debt, global conflict, and unemployment.

Beneath it all, the same question keeps surfacing: What if the systems we counted on to make sense of this, the Fed, the labor market, the political process, even the data itself, aren’t as reliable as they used to be?

In this part of the cycle—call it a Fourth Turning or something else—what matters most isn’t squeezing every last bit of upside. It’s preserving capital, staying disciplined through change, and having cash coming in even when prices won’t cooperate.

That’s where dividends come in. Dividends excel when the tides turn, when direction is uncertain, and when income matters more than momentum.

The data backs that up. Through down markets, flat markets, and even normal up years, dividend growers have historically lost less on the way down and still captured much of the upside on the way up. Outperforming both non-payers and the broader index.

From 1985–2024, dividend growers in the Russell 1000 held up better in down markets, stayed resilient in flat ones, and still participated in strong years delivering the mix of defense and offense investors who can’t afford a lost decade are looking for. ¹

It’s perfect for those of us without 20 or 30 years to make it back.

In the years that hurt most, dividend growers didn’t just fall less—they kept paying. That’s the difference between a drawdown we can ride through and one that permanently changes our retirement math.

Over time, the S&P’s dividend growth rate (the year‑over‑year change in total dividends paid per share, after inflation) tends to move within a relatively narrow band, roughly –10% to +10% in most years. The true outliers align with historic shocks like world wars or the Great Depression, not ordinary bad headlines.  ²

That’s what a dividend paycheck looks like: imperfect, but reliable.

Price changes, by contrast, swing violently in both directions, reflecting investor emotion more than business reality.

When that happens, when everything feels correlated and diversification seems to break down, dividend income does something prices can’t: reflect actual cash flows. Remember, prices move for a variety of reasons. Dividends tend to move with the business.

Volatility isn’t the only risk, either. Inflation and rising costs quietly eat away at what each dollar of income can do.

Which raises a fair question: What’s the point of dividend income if the dollar itself keeps losing value?

The question shifts from: “What if my portfolio is down 15% this year?” to “What if the dollar buys 15% less, and healthcare costs keep climbing?”

This is where dividend growth begins to matter even more.

That’s exactly why John and I have been spending so much time thinking about and writing about dividend investing the right way—the essential way— focusing on companies with durable businesses and growing payouts that can keep delivering real income, even in uncertain markets.

For more income, now and in the future,

Kelly Green

^[1] https://www.troweprice.com/en/us/insights/why-dividend-growth-investing-has-staying-power

^[2] https://www.simplysafedividends.com/world-of-dividends/posts/1038-what-happens-to-dividends-during-recessions-and-bear-markets

Where We Go from Here | Why Income Must Lead

The most important question to ask…

“How do I get as much of today’s real buying power to the other side of this decade as possible—and still be in position to benefit if things eventually get better?”

Over the past few days, you’ve been hearing from John about converging cycles—the Fourth Turning, AI displacement, institutional strain, geopolitical reordering.

In your survey responses, many of you told us this doesn’t feel like a normal cycle

So when we asked what you’d prioritize in a decade of modest returns and repeated drawdowns, the answer was clear: reliable income.

At the same time, many of you admitted that if markets declined—or simply stopped rising—very little of your portfolio would generate meaningful cash flow.

That becomes a real problem if this cycle plays out the way many of us anticipate—long stretches of "flat with spikes" that punish investors who still rely on rising prices to make the math work.

Faced with that, we found ourselves asking a different question:

How do we get as much of today’s real buying power to the other side of this decade as possible, while still being positioned to benefit if things eventually improve?

Inside Mauldin Economics, we’ve arrived at much the same conclusion you have.

The overlapping cycles John has written about for years—the debt supercycle, demographic strain, technological disruption—make it entirely reasonable to plan for a flat‑with‑spikes decade ahead.

I think we can admit the system behind the numbers may not be as solid as it once seemed—debt is piling up, the dollar buys less, there will be further questions about the official data. That’s doesn’t end in a single year.  That’s years of slow erosion of buying

power and confidence.

Income has to lead

Dividend investing, when done right, is one of the few ways ordinary investors can push back against that.

Look back at the last major inflationary stretches—around 1973, 1979, and the early 1990s. In the S&P 500, dividend income grew roughly 10% a year even as inflation ran hot and the economy struggled. Unemployment was elevated. Automation fears were everywhere. Trust in institutions was frayed, yet many companies kept raising their dividends and the cash kept flowing.

That doesn’t mean every dividend is safe, or that the next decade will look exactly like those periods.  But across very different environments, prioritizing cash‑paying, pricing‑power businesses has been one of the more reliable ways to stay ahead.

Introducing Essential Income

All of this—your survey responses, John’s macro work, Kelly Green’s research on income as the anchor—led us to a simple conclusion: if this decade even rhymes with past inflationary, or flat‑with‑spikes periods, then a deliberate income strategy has to move from “nice to have” to “essential.”

That’s the idea behind Mauldin Economics' Essential Income, our weekly dividend research service.

We’re not throwing out what’s worked. For years, our income research has helped thousands of readers find solid, cash‑generative companies. 

Essential Income builds on that legacy, with an income investment approach designed specifically for this decade—same philosophy, but with a new structure.

Instead of a single all-purpose strategy, our research now focuses on two clear aims: helping you generate enough income to sleep at night—and still grow your wealth in a world that may be sideways, unpredictable, and fragile.

Unlike most income services that check in once a month, Essential Income delivers fresh research every week. Not because we need to trade constantly, (we don’t) but because when conditions shift or new developments appear, you shouldn't have to wait 30 days to hear about it. Most weeks won't require action. But when something matters, a dividend cut, a catalyst, a portfolio adjustment, you'll know immediately, not a month later.

What I’d like you to do today

I’m not asking you to make any decision today. I do believe every long‑term investor needs some level of dependable income. But what I am asking is that you take an honest look at the role income plays in your own plan.

Ask yourself, “If prices go nowhere for five years and my costs keep climbing, do I have enough income coming in?”

If the honest answer is “no,” or even “I’m not sure,” then I invite you to watch for an email from Kelly Green about Essential Income tomorrow.

She’ll lay out exactly how we’re structuring these portfolios for this environment, and how you can join us for what comes next. If that describes you, I think you’ll find tomorrow’s note worthwhile.

Ed D'AgostinoPublisher & COO, Mauldin Economics