The current market environment may be well-suited for investors looking to rebalance equity portfolios to lower overall volatility.
All crises are inherently different. However, people’s reaction to them is remarkably consistent, and there's no evidence to suggest this has changed.
Sustainable dividend stocks may offer equity exposure and yield with some insulation from price fluctuations.
It's important for investors to maintain a long-term view on equities, with a risk/return profile they can tolerate, even in the worst of times.
Stocks with high current dividends and stocks that consistently increase dividends both have unique characteristics that can affect investor outcomes.
Chart of the Week
Chart courtesy of ClearBridge Investments. * Institutional & Retail Money Funds – ICI. ** MSCI U.S. IMI Index. Data as of July 3, 2020. Source: FactSet. Past performance is no guarantee of future results. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges. This information is provided for illustrative purposes only and does not reflect the performance of an actual investment
Chart of the Week
The collapse in oil prices has added to market dislocations and uncertainty associated with the coronavirus pandemic.
Weakness in manufacturing data, hours worked and building permits is helping to keep our proprietary leading economic indicator in negative territory, despite overall improvement over the past month.
It's important for individuals to maintain a consistent exposure to equities, despite episodes of market mayhem like the one we're seeing now; allocating to a low-volatility dividend strategy may make that easier.
Equity ideas for 2020
Consumer stability and central banks may sustain the global expansion during 2020, but uncertainty lurks in persistent geopolitical issues.
Lower volatility stocks with sustainable dividends and attractive valuations may provide a defensive tilt to portfolios in a late cycle environment.
Dividend stocks in defensive sectors, which exhibit lower overall beta and less vulnerability to drawdowns, could be useful to many investors in the current environment.
All investments involve risk, including loss of principal. Past performance is no guarantee of future results. Please see each product’s webpage for specific details regarding investment objective, risks, performance and other important information. Review this information carefully before you make any investment decision.