The investment world is generally divided into two categories – growth investing, and dividend investing. Many investors prefer to park their money in growth stocks that can help to lift the value of their portfolio to better prepare themselves for retirement. However, growth stocks are generally more volatile and may also come with higher risks. The recent market turmoil, which saw the NASDAQ Composite Index enter a correction, is a prime example. Dividend stocks can shield you from this volatility and allow you to sleep well at night. Here are three key reasons why you should include such stocks within your portfolio.

A guaranteed return

Simply put, a dividend received is considered a guaranteed return. In comparison, gains enjoyed from share price movements called “capital gains”, are not recognised until you sell the stock. Hence, such gains may evaporate should the market stumble and fall sharply, which is what happened recently with the US technology stock index....