Dividends Crucial Now
S&P 500 Dividend Yield by Sector
Mitigating Risk Amid Volatility
- Lower Equity Market Beta: Exposure to defensive equities can reduce overall beta of investor portfolios, thus helping to navigate periods of volatility, while continuing to allow for stock market participation.
- Defensive Equity Income: At this point in the market cycle, transitioning a portion of fixed income or growth equity allocations into defensive equity income strategies remains a compelling option. As bond yields have fallen and growth prospects have softened, stocks with steady dividend payouts and lower volatility profiles are likely to play an increasingly integral role in the portfolio. Dividends typically become a larger and more stable component of total return in low return environments and lower volatility profiles may mitigate drawdowns during periods of market turbulence.
Growth: Turning a Corner
The Momentum Continues
Cautious Optimism for Equities
Realistic About Risk
Looking Beyond the U.S.
Where Do We Go from Here?
U.S.-China: Fallout from Trade Tensions?
Royce & Associates
Resilient Growth, Despite Uncertainty
Yields and dividends represent past performance, and there is no guarantee they will continue to be paid.
U.S. Treasurys are direct debt obligations issued and backed by the "full faith and credit" of the U.S. government. The U.S. government guarantees the principal and interest payments on U.S. Treasurys when the securities are held to maturity. Unlike U.S. Treasury securities, debt securities issued by the federal agencies and instrumentalities and related investments may or may not be backed by the full faith and credit of the U.S. government. Even when the U.S. government guarantees principal and interest payments on securities, this guarantee does not apply to losses resulting from declines in the market value of these securities.
The Federal Reserve Board ("Fed") is responsible for the formulation of U.S. policies designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments.
"Brexit" is a shorthand term referring to the UK vote to exit the European Union.
Inverted yield curve refers to a market condition when yields for longer-maturity bonds have yields which are lower than shorter-maturity issues.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) is a measure of market expectations of near-term volatility as conveyed by S&P 500 stock index option prices.
Beta measures the sensitivity of an investment to the movement of its benchmark. A beta higher than 1.0 indicates the investment has been more volatile than the benchmark and a beta of less than 1.0 indicates that the investment has been less volatile than the benchmark.
Forecasts are inherently limited and should not be relied upon as indicators of actual or future performance.
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Equity securities are subject to price fluctuation and possible loss of principal. Fixed-income securities involve interest rate, credit, inflation and reinvestment risks; and possible loss of principal. As interest rates rise, the value of fixed income securities falls.
International investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets.
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Past performance is no guarantee of future results. Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.
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