Investors’ concerns over the looming interest rate hike are influencing the performance of the benchmark stock indexes. As high inflation is projected to persist for an extended period, the central bank will likely aggressively raise the benchmark interest rates this year.
Therefore, investors looking to dodge the market volatility could invest in dividend-yielding stocks to ensure a steady income stream. Wharton finance professor Jeremy Siegel believes that the investor sentiment will be stable enough while foreseeing the S&P 500 rising 9% in 2022. Emphasizing dividend stocks, he stated, “dividend stocks are protected against inflation because firms have been able to raise their prices, their cashflows, and increase their dividends.”
