Deep Dive: These dividend stocks can protect you as the Federal Reserve slows the economy

by | Aug 25, 2022 | Stock Market

With Federal Reserve Chairman Jerome Powell set to deliver an important speech Friday, investors may finally begin to take him at his word: The central bank is going to maintain a hawkish stance to control the highest inflation in four decades. This means financial markets will remain volatile, despite the recent stock market rally. Read: Financial markets are bracing for what could be a ‘very hawkish’ Jackson Hole speech by the Fed’s Powell

There are many reasons to consider real estate investment trusts, or REITs, as relatively safe havens to provide steady income when inflation remains high and ahead of a likely economic slowdown. Below is a screen of equity REITs expected to produce plenty of cash flow to enable dividend increases in 2023. In the Need to Know column on Aug. 24, Steve Goldstein summarized predictions of a new “supercycle in inflation and interest rates” from Dario Perkins, managing director for global macro economics at TS Lombard. Perkins expects long-term interest rates to keep moving higher, and suggests the 2020s will require investors to take “a more discerning approach to asset allocation.” Moving away from service providers that dominated the bull market through 2021, he believes what will work best is allocation to tangible assets, including real estate. Breaking down the REIT sector Real estate investment trusts come in many varieties, but the key element is they pass through most earnings to shareholders to maintain the tax-advantaged REIT structure. There are two br …

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