Sustainable dividend stocks may offer equity exposure and yield with some insulation from price fluctuations.
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.
Lower volatility stocks with sustainable dividends and attractive valuations may provide a defensive tilt to portfolios in a late cycle environment.
All crises are inherently different. However, people’s reaction to them is remarkably consistent, and there's no evidence to suggest this has changed.
The current market environment may be well-suited for investors looking to rebalance equity portfolios to lower overall volatility.
Chart of the Week
Chart inspired by QS Investors. Source: Bloomberg, as of 5/26/20. RHS = Right hand scale. LHS = Left hand scale. 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.
Our tactical stock-bond model continues to favor investment grade bonds over U.S. stocks.
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.
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.
Stocks with high current dividends and stocks that consistently increase dividends both have unique characteristics that can affect investor outcomes.
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.