Recent data from Crestmont Research suggests that dividend stocks are a wise investment during periods of economic uncertainty and bear markets. The research shows that income stocks have historically outperformed non-dividend paying stocks over long periods. Moreover, the Federal Reserve is continuing to raise interest rates in an effort to combat inflation, which is currently at an all-time high.[0]
The research from Crestmont Research examines the rolling 20-year total returns of the S&P 500.[1] This data provides investors with an idea of what their average annual total return would be if they purchased an S&P 500 tracking index at any point since 1900 and held for 20 years.[1]
Experts are predicting that the Fed will raise rates to 5% or above and keep the restrictive policies in place until the end of the year.[2] This is why it is important for investors to look towards dividend stocks as a way to hedge their downside during the current bear market.[3] Companies that pay a dividend are typically profitable on a recurring basis and have proven their ability to navigate bear markets and/or economic downturns.[1]
In conclusion, current market conditions are a great opportunity for investors to put their money to work in dividend stocks. Not only do these stocks provide a steady income stream, but they have historically outperformed non-dividend paying stocks over long periods. Investors should do their research and consider putting their money into dividend stocks as a way to stay the course and hedge their downside during the current bear market.
0. “SPY: Bears Back in Charge?” StockNews.com, 19 Feb. 2023, https://stocknews.com/news/spy-inx-dia-iwm-qqq-bears-back-in-charge/
1. “The Telltale Bear Market Signal for Stocks Is Back” Nasdaq, 19 Feb. 2023, https://www.nasdaq.com/articles/the-telltale-bear-market-signal-for-stocks-is-back
2. “The Bear Market Ain’t Over Till It’s Over” The Epoch Times, 23 Feb. 2023, https://www.theepochtimes.com/the-bear-market-aint-over-till-its-over_5078440.html
3. “This Bear Market Predictive Tool Hasn’t Been Wrong in 77 Years: Here’s Where It Says Stocks Head Next” The Motley Fool, 26 Feb. 2023, https://www.fool.com/investing/2023/02/26/bear-market-predictive-tool-not-wrong-in-77-years/