A risk-off environment bodes well for these companies
When trouble hits, the first instinct is to run but if you
insist on holding your ground, you might want to consider pivoting your funds
toward safe dividend stocks to buy. With the broader economic framework
incentivizing stability over growth potential, investors are better served
focusing on profitable companies that are able to reward their shareholders
with consistent passive income.
To be sure, the prior paradigm of low interest rates
bolstered growth-oriented names because the risk-reward profile essentially
favored speculation. A perfect confirming example of this assessment is
cryptocurrencies. They neither provide businesses nor dividends yet they have
skyrocketed thanks to a profligate Federal Reserve. Now it’s the opposite
situation where saving money is incentivized. Naturally, this dynamic bolsters
safe dividend stocks to buy.
Fundamentally, when the Fed raises borrowing costs, the net
effect is deflationary. Spending diminishes, resulting in households eschewing
discretionary purchases for the necessities. In this environment, it’s the most
established businesses that generally perform well, which is great news for
safe dividend stocks to buy.
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