Dividends4Life: Dividend Stocks To Defend Your Portfolio

Dividend Stocks To Defend Your Portfolio

Posted by D4L | Sunday, May 09, 2010 | | 0 comments »

What happens when that raging bull market suddenly and unexpectedly turns bearish, and all your high fliers start looking like falling stars? That's when the savvy investor gets nimble and starts rotating into more conservative stocks, adapting a more defensive position to protect those gains from unwanted volatility.

Maybe we should place this one under the "self fulfilling prophecy" category, because when investors flock to dividend stocks during times of market turmoil, that surge in demand can provide some much needed protection in a volatile market. Most dividend stocks tend to be large-cappers, which have historically been more stable than the small and mid cappers, which in and of itself provides another layer of stability. And when you factor in the guaranteed return of the dividend, producing a stream of income when capital gains and losses are in question, its easy to see why investors love dividend stocks during times of market peril.

Source: Zacks


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