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Wall Street pros have been taking a careful look of the
stock markets in light of the recent gains. The S&P 500 was up 5.5% by the
end of July, and the gains have continued into August.
CFRA strategist Sam Stovall sees conditions as overbought,
and believes that investors are in for a shock between now and the end of
September – in the form of a 5% to 10% sell-off.
Stovall cites a number of factors to support his contention
that we’re on the verge of a market cliff, including “tech and large-cap
dominance, the concerns surrounding soaring gold prices, the falling
dollar, [and] historically low interest rates…” Stovall looks back at his 35
years’ experience on Wall Street, and notes that he typically sees the S&P
average drop 1% in August. 2020 is hardly a typical year, however, and Stovall
believes the downward pressures will be correspondingly greater.
The upshot is, while increased volatility is almost
certainly going to stay with us for a while, it’s time to consider defensive
stocks. And that will bring us to dividends. By providing a steady income
stream, no matter what the market conditions, a reliable dividend stock provides
a pad for your investment portfolio when the share stop appreciating.
With this in mind, we’ve used the TipRanks database to pull
up three dividend stocks yielding 5% or more, with a Strong Buy consensus
rating and over 20% upside potential.
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