UBS Eyes U.S. Corporate Bonds, Dividend Stocks

UBS Wealth Management Research tells investors they’ll need to stay defensive, focus on income, and be prepared to use volatility to their advantage next year, predicting that geopolitical risks will persist and global earnings growth will stall. Some tips from UBS’s 2012 outlook report:

1. Focus on income-generating investments, but look beyond traditional sources of income, mainly toward dividend-paying stocks, which offer “a healthy combination of defensive characteristics, growth prospects and income generation.” 2. Prefer U.S. fixed income to non-U.S. fixed income, and look to domestic credit markets, particularly high-yield bonds; lower-tier investment-grade bond sectors including managed-care, mining, oil and gas, and communications; as well as senior unsecured debt of diversified U.S. banks and select insurance companies.

Source: Baron's

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