Stocks are at record highs. The multi-decade bull market for bonds is likely over. But these days, even playing defense requires treading carefully. What's a cautious, long-term investor to do? Sitting in cash or super-short-term investments may seem like a way to protect your money, but it's actually a money-losing proposition. That's because inflation is slowly eroding away the value of your investment even if your portfolio balance isn't changing.
The good news is there are plenty of ways to tilt a portfolio toward stock and bond investments that offer inflation protection as well as some cushion should financial markets once again get bumpy. There are funds focused on stocks with growing dividends whose payouts can soften declines in stock prices. Corporate-bond funds offer some refuge from losses that are sure to hit whenever the Federal Reserve raises interest rates. But with so many investors keeping one foot on the brake, the current environment requires keeping in mind two basic rules of investing. First, price matters. Even safe investments can be risky if you overpay for them. And second, diversification works. But take time to understand how each investment performs in times of stress.
Source: Wall Street Journal
Related Articles:
- Dividend Stocks Are My Conviction
- Are The Dividends Safe For These High-Yielding Stocks?
- My 2012 Top And Bottom Performing Dividend Stocks
- 7
Dividend Stocks With Room To Increase Their Payout
- 9 High Rated, Lower Debt Dividend Stocks With A Reasonable Payout
Playing Defense When Investments Get Pricey
Posted by D4L | Thursday, March 21, 2013 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
We screened our 24/7 Wall St. dividend equity research database and found 5 stocks that combined can generate over $3,000 of annual passive ...
-
The stock market has been on an upward path of late, with some of the most prominent stocks hitting astronomical highs. The dividend yield o...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
Dividend growth stocks can be incredibly attractive investments if you crave recurring income. As these types of stocks raise their dividend...
-
In my opinion, there are three criteria investors should consider when evaluating a particular stock for their portfolio. The first is histo...
-
In this article, we discuss 5 best March dividend stocks to buy. If you want to read our detailed analysis of dividend capture strategy and ...
-
As the broader stock rally broadens to some of the more “boring” corners of the market, it’s the higher-yielding dividend plays that could s...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.