Sector Diversification for Dividend Investors
Spreading your dividend portfolio across multiple sectors reduces concentration risk. Consumer Staples and Healthcare tend to be the most resilient during recessions, while Industrials and Financials offer stronger growth potential in expanding economies.
Most Dividend Kings and Aristocrats are concentrated in defensive sectors, which is one reason they have managed to maintain unbroken dividend growth streaks through multiple market cycles including the 2008 financial crisis and the 2020 pandemic.