Euphoria has rushed back into the stock market, and that means now is a good time to buy dividend stocks
The stock market is on fire right now. Year-to-date, the
S&P 500 is up 11%, and it isn’t even March yet. Further, the S&P 500 is
up nearly 20% from its Christmas Eve lows and it is now just 5% off all-time
highs.
While I’ve been bullish on this 2019 stock market turnaround
for some time now, I also realize that there are still risks out there which
could subdue the current rally in stocks. U.S. and China trade talks are
progressing, but there’s no resolution yet. The global economy remains healthy,
but it is slowing. Consumer confidence remains high, but it is dipping.
Earnings remain strong, but costs are rising, margins are dropping and earnings
growth is slowing.
Overall, the current economic backdrop for stocks is
bullish, but it has risks. Right now, with the S&P 500 trading at a very
normal 16.3 forward earnings, valuations seem to reflect reality. Thus, the
outlook for continued gradual gains is healthy. But, a repeat of January and
February 10%-plus rally is unlikely.
With stocks set to slow, now is a good time to start buying
into dividend stocks. These stocks tend to outperform when the broader stock
market slows since they are seen as protection from volatility. Further,
dividend stocks could get a nice boost in 2019 if the Fed remains cautious,
doesn’t hike, and rates largely remain low.
Overall, now seems like a good time to add some stability to
the portfolio through dividend stocks. With that in mind, here’s a list of
seven healthy dividend stocks to buy in 2019.
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