JPMorgan Chase CEO Jamie Dimon said he felt "terrible" about having to virtually eliminate the bank's dividend this week. But investors in Chase and other companies may feel even worse as the record pace of dividend cuts accelerates across the corporate landscape.

For income-seeking investors, the blue-chip companies that have traditionally paid out substantial dividends every quarter have represented a last sure thing in an investing world gone haywire.

Now, it seems they can take nothing for granted. While most of the companies to slash dividends in 2009 are in the critically ill financial industry, others such as Pfizer Inc. and Dow Chemical Co. have followed suit within the last month and more undoubtedly are yet to come.

"I don't think you can now just 'check the box' and say this stock has a high dividend yield, put it away and not look at it any more," said Mark Freeman, a portfolio manager at Dallas-based asset management firm Westwood Holdings Group. "Unfortunately that strategy is not going to work."

JPMorgan Chase & Co. slashed its quarterly dividend Monday by 87 percent, from 38 cents down to 5 cents. The cut adds just one more to a rapidly growing total of $21.6 billion in dividend cuts this quarter, well beyond the previous record of $15.9 billion made in all of the fourth quarter.

For investors, a reduction in dividends is akin to a small but festering pay cut. They may not notice it much in the short term, especially in this chaotic environment. But its impact is magnified by compounding as time goes on.

Thanks to that compounding effect, dividends have represented 43.8 percent of investors' total returns since 1926, according to Standard & Poor's analyst Howard Silverblatt.

After seeing stock values plummet twice in painful bear markets this decade, many investors _ especially long-term and conservative ones _ have come to rely on companies' dividend payouts. They shun speculative growth stocks and their unpredictable price spikes.

The good news is that experts don't think this is the beginning of the end for dividends, or for dividend-focused strategies. It just adds another reason to pay closer attention to stocks during the recession.

"As long as you're diversified, as long as you're looking for companies that have strength in their balance sheet and their business, sticking with the strategy makes all the sense in the world," said Josh Peters, editor of the Morningstar Inc. newsletter DividendInvestor. "The dividend isn't going away across the market."

Indeed, many of the companies that have a record of increasing dividends for at least 25 consecutive years already have taken action to raise them again this year. In February alone that group includes eight members of the S&P 500 _ among them 3M Co., Archer Daniels Midland Co. and Coca Cola Co.

Companies typically try at all costs to avoid cutting dividends because it can be read as a sign of trouble to investors and the stock market usually drives their share prices down in response. But Chase's stock actually jumped 8 percent Tuesday following Monday's after-market announcement, showing the market tolerates and even encourages such cuts in dire times.

"Cutting dividends is acceptable today," Silverblatt said. "If a company needs to preserve its cash, it's legitimate and companies actually should be cutting their dividends."

Investors should be wondering why even more companies have not cut their dividends during this crisis, given the tightening cash flows, according to John Graham, professor of corporate finance at Duke University's Fuqua School of Business.

"Some firms, like IBM, might want to indicate that they are so strong they can continue to pay a dividend even when others are cutting dividends," he said. "That's a dangerous game that should only be played by strong firms."

Graham, who has done extensive research on dividends, sees no negative long-term implications "beyond us already knowing that our financial system is a mess."

He even thinks moving away from dividends might be a good thing from the investor tax perspective, citing indications that President Barack Obama will let dividend tax rates revert to the pre-Bush levels that could leave them more heavily taxed than capital gains. Dividends and capital gains are both currently taxed at 15 percent.

Even patient and understanding investors, though, will want to know how long it might be before dividends come back.

The answer lies in the timing of an economic comeback. Companies that reduced dividends will want to feel confident they have stable, predictable earnings going forward before they restore dividends to historic trend lines. Experts say that may mean not until a couple of years after the recession ends.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.