Dividend Stocks Are Valuable in a Volatile Market

Where dividends are concerned, experts contend there's no reason to panic just yet. "I don't see short-term market chop being a factor with regards to dividends," says Merlin Rothfeld, investment strategist and instructor at Online Trading Academy, based in Orange County, California. "Short to intermediate swings are great for active traders, but shouldn't have much impact on earnings."

What's more, dividends look into the future as companies base them on projected future earnings. "If prices continue down, this will put pressure on the consumption cycle resulting in weak earnings," Rothfeld says. "If that weakness persists, companies will begin to cut dividend payments." "We don't expect dividend stocks as a class to be singled out by volatility," adds Kevin Barry, chief investment officer at Captrust Financial Advisors and based in Raleigh, North Carolina.

Source: US News

Related Articles:
- 5 Under-Valued Dividend Growth Stocks
- Dividend Stocks vs. a Safe Distribution Rate
- 5 Select High-Yield S&P 500 Dividend Stocks
- A Winning Investment Strategy
- 5 Dividend Stocks With A 20% Yield In 20 Years