The rally that took place this week has been great, and the reasons from strategists are many, but one thing is for sure: things could get a little more dicey this summer. The first consideration of course is whether the Federal Reserve will raise rates in June or July — one of the two looks like a lock. Secondly, will the United Kingdom exit the European Union? That looks like a jump ball. Lastly, politics. All summer long into the conventions, the rhetoric is going to get louder, and if we have continued civil disorder, that will stir the pot as well.
We know that it is a nonstarter for most investors to just “move to cash,” given commissions, tax gains/losses and other items. One good idea may be to switch from higher beta stocks to lower ones, especially dividend leaders. They will respond better to higher volatility and fare better in a sell-off. We screened the Merrill Lynch research universe for Buy-rated dividend stocks with the firm’s best volatility rating.
These four look like good bets now…
Source: 24/7 Wall St.