Galloping inflation, supply chain disruptions, the resurgence of COVID-19 cases, and escalating geopolitical tensions have fostered significant market volatility. The stock market rose in the last trading session, breaking a long streak of weekly declines, the Dow added 516.91 points, while the S&P 500 climbed about 2% to 4,057.84, and the Nasdaq Composite advanced nearly 2.7% to 11,740.65. However, analysts believe this relief rally will be short-lived and does not indicate a change in the overall trend.
Goldman Sachs calculates the odds of a recession at 35% over the next two years. Amid the heightened market volatility, investing in quality dividend stocks could hedge one’s portfolio and ensure a stable stream of returns. Investors’ interest in dividend stocks is evident in the SPDR S&P Dividend ETF’s (SDY) 0.5% returns over the past three months versus the broader SPDR S&P 500 Trust ETF’s (SPY) 7.4% slump.
