The notion that high-yield dividend stocks tend to outperform the broader markets is part of Wall Street lore. In fact, this idea has roots in Charles Dow's iconic 1920 book, Scientific Stock Speculation. Reality, though, hasn't matched up with this claim in recent history.  

Since the end of the era of easy money in 2022, rising interest rates have driven investors into a small cadre of mega-cap companies -- colloquially known as the "magnificent seven" -- with strong balance sheets, exceptional free cash flows, and top-shelf management teams. Meanwhile, high-yield stocks, on balance, have languished. Underscoring this point, the bellwether Vanguard High Dividend Yield Index Fund has badly underperformed the broader markets in 2023. 

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Source Fool.com