The U.S. stock market is in a bull-bear tug of war and naturally, analysts and market watchers are, at this point, divided over speculations as to where the market is headed.
Though the middle stance seems most plausible, the markets may witness higher volatility in the days ahead. Moreover, the ongoing see-saw in the financial stock markets across the globe is giving investors the jitters.
Given the economic uncertainties currently gripping the market, it would be wise for investors to safeguard their wealth. It goes without saying that monetary security tops the priority list in volatile market conditions.
Time for Income Investing
Income investing targets companies that provide a steady stream of income and is naturally one of the most straightforward stock-picking strategies.
Though the income investing style is almost always overlooked, this could actually be a suitable time for such a strategy as it cushions an investor’s portfolio given the said stocks’ low risk, diversification benefits and ready access to funds. Notably, such stocks provide a steady source of income through solid dividend payouts and there are several benefits associated with the same.
Dividends are a less risky component of total return compared to capital appreciation and dividend stocks are historically less volatile than non-dividend stocks. This could be a vital factor if volatility levels run higher from here. These stocks are a safe bet to create wealth as dividends generally act as a hedge against economic uncertainty, and reflect a company’s solid financial structure and healthy underlying fundamentals.
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