| During the month of August, the tech-heavy NASDAQ Composite index fell 2.6%. At the same time, the Vanguard Utilities Index ETF (NYSE: VPU) gained 4.5% as shown in the chart below. 
Unfortunately, that fund's 2.8% dividend yield is less than half of the 6% threshold most of my pickleball buddies need to make ends meet. The challenge, then, is in creating a portfolio that delivers both high yield and share price stability. After all, that's why people buy bonds in the first place, right? If the Fed does cut rates again, bond yields will go even lower. That means bond prices will go a bit higher, at least for a while. But sooner or later, interest rates will bottom out and eventually reverse course. And when that happens, bond owners might begin to panic. Bond Abandonment Two years ago, I postulated that a wave of money coming out of the bond market could drive high-dividend value stocks higher. That hasn't happened yet, thanks to last year's tax cut that fueled momentum stocks a bit longer than I expected. Most of the benefits from the tax cut have been realized. Now, trade tariffs threaten to undo all that gain and then some. I believe the stock market's rotation from growth to income will accelerate next year as the federal deficit begins to widen. As that occurs, the Treasury will have to sell more debt to finance the budget. That will push bond prices lower. In the United States, the bond market is nearly twice as big as the stock market. That means a 10% move out of bonds could increase demand for stocks by as much as 20%. Since that money is coming out of bonds, it is not unreasonable to assume that most of it will be looking for income. High yield stocks with a history of raising dividends should be the primary beneficiaries. As I explained this to my pickleball buddies in South Carolina, I could see the light slowly coming on in their heads. But for some, even an annual yield of 6% isn't enough to get the job done. For them, I suggest they check out what my colleague Amber Hestla has been up to lately. Amber is the chief investment strategist of the trading services Income Trader, Profit Amplifier and Maximum Income. Amber will be part of a special online event, scheduled for September 24, that will pinpoint money-making opportunities in one of the greatest investment opportunities you'll ever see in your lifetime - marijuana. But here's the snag: the industry is getting crowded and a shake-out is imminent. You need to pick the right marijuana stocks. That's where Amber's special event comes in. If you act quickly, you can secure a spot at our exclusive cannabis trading event on September 24. We'll show you how to make life-changing amounts of money, within a highly lucrative (but largely unknown) sliver of the marijuana market. Click here to sign up. | 
Tidak ada komentar:
Posting Komentar