Five dividend funds to buy offer high yields and a measure of protection if the market fall again in the weeks and months ahead.
Three of the five dividend funds to buy benefit from “active portfolio managers” who have the leeway to choose their holdings, unlike less flexible funds whose portfolios track the performance of a market index, such as the Dow Jones Industrial Average, the Standard & Poor’s 500 or the NASDAQ. During the stock market drop in March, active managers were able to reduce the risk of the funds they managed by scooping up quality assets that were selling at sharp discounts.
“There was a lot of forced selling in March because leveraged investors faced margin calls as prices declined,” said Bob Carlson, who is chairman of the Board of Trustees of Virginia’s Fairfax County Employees’ Retirement System with more than $4 billion in assets and leader of the Retirement Watch advisory service. “To raise cash, they had to sell assets. They sold high-quality assets because there were no buyers for low-quality assets at the time.”
Bob Carlson responds to Paul Dykewicz’s questions during an interview.
There were 4.4 million new unemployment claims filed in the latest week. Since mid-March, total new unemployment claims top 26 million.
Anecdotes indicate the latest unemployment numbers may be low, since the volume of people seeking to file claims has been too much for online and telephone application systems to handle.
The opportunity to invest in dividend-paying funds that offer strong growth potential includes the chance to buy them at reduced prices after the stock market crashed roughly 30 percent in six weeks from Feb. 24 to March 16 as coronavirus cases spread from China and Europe to the United States. Specifically, between Feb. 24 and the close of trading on Monday, March 16, the Dow Jones Industrial Average (DJIA) tumbled 31%, the S&P 500 dove 29% and the Nasdaq tanked 30%.
Chart courtesy of www.StockCharts.com
Paul Dykewicz meets with Jim Woods to discuss the latest investment opportunities.
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Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce,Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is endorsed by Joe Montana, Joe Theismann, Ara Paseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Follow Paul on Twitter @PaulDykewicz.
