Unlocking the Power of Dividend Stocks
Are you looking for a sound investment strategy that can weather the storm of market volatility? Look no further than dividend stocks. As we approach the Federal Reserve’s upcoming interest rate decision in September, more and more investors are turning to dividends as a safe haven for their investments.
Paul Baiocchi, Chief ETF Strategist at SS&C ALPS Advisors, believes that diving back into dividends could be a smart move, especially with the Fed expected to ease rates. “Investors are moving back toward dividends out of money markets, out of fixed income, but also importantly toward leveraged companies that might be rewarded by a declining interest rate environment,” Baiocchi shared on CNBC’s “ETF Edge.”
At Extreme Investor Network, we understand the appeal of dividend stocks in uncertain times. That’s why we recommend exploring dividend exchange-traded funds like the ALPS O’Shares U.S. Quality Dividend ETF (OUSA) and its counterpart, the ALPS O’Shares U.S. Small-Cap Quality Dividend ETF (OUSM).
Compared to the S&P 500, both OUSA and OUSM are overweight in sectors like healthcare, financials, and industrials while excluding energy, real estate, and materials – sectors known for their volatility. Baiocchi emphasizes the importance of investing in dividends that are durable, growing, and well-supported by fundamentals to provide drawdown avoidance.
Mike Akins, Founding Partner at ETF Action, sees OUSA and OUSM as defensive strategies due to the clean balance sheets of the stocks within the ETFs. He notes a surge in popularity for dividend categories in ETFs, pointing to the sense of viability that comes with consistent dividend payments.
In a market filled with uncertainties, dividend stocks offer a beacon of stability. Their ability to generate income and provide downside protection makes them a valuable addition to any investment portfolio. At Extreme Investor Network, we empower investors like you to unlock the power of dividends and navigate the ever-changing landscape of the financial world. Join us in building a robust investment strategy that stands the test of time.