Protect yourself from sharply declining purchasing power
If you didn’t recognize the impact of inflation before the
geopolitical flashpoint in eastern Europe, you’re certainly feeling it now.
With gasoline prices soaring to $6 or $7 in some regions, the negative paradigm
shift is palpable. Worse yet, inflation is essentially a tax on working
Americans due to declining purchasing power. Still, you may be able to protect
yourself with dividend stocks to buy.
Under this asset class, you have two potential mechanisms of
success. First, dividend stocks are typically (though not always) tied to
reliable and predictable businesses. Therefore, a chance exists that they could
facilitate capital gains. Second, these assets provide passive income, which
can significantly help buffet the shock of skyrocketing prices.
Indeed, as Laura Barclay, a senior portfolio manager at TD
Wealth stated to BNN Bloomberg, the yield on investments like guaranteed
investment certificates and government bonds can leave you “with a negative
return on your money.” Instead, pivoting toward dividend stocks can help
investors keep up with the rising cost of living.
Still, not every name will do. Below is an eclectic list of dividend stocks to serve various purposes and risk-reward profiles.
Very important to get your sitting cash invested so that it's not diminishing to the inflation. Was speaking to a family member about this today and for the life of me I could not convince him to invest rather than sit on his lump sum of cash on hand. I guess time will teach him.
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