Fed Reserve Governor Lael Brainard and San Francisco Fed Reserve President Mary Daly recently emphasized the need to raise interest rates aggressively to fight surging inflation. This, along with further Western sanctions on Russia in response to its Ukraine invasion, has dampened investor sentiment. What is more, the intensifying supply chain disruptions and a resurgence of COVID-19 cases in many states could add to the volatility in the coming months.
According to Jefferies analysts Aneta Markowska and Thomas Simons, “It's premature to start the recession countdown. This does not look like a late-cycle economy; It's a mid-cycle economy and the business cycle has room to run.” Therefore, investors looking to dodge the short-term market fluctuations could bet on high-yielding dividend stocks. Investors’ interest in high dividend stocks is evident in the iShares Core High Dividend ETF’s (HDV) 5.8% returns over the past three months.
