Dividend Stocks To Weather Rising Rates

The Fed’s going to taper. The Fed’s not going to taper – at least not immediately. Last week’s flip-flop by the U.S. Federal Reserve may have brought some short-term relief for dividend stocks, which have struggled amid rising bond yields. But longer-term, rising interest rates remain a threat. What’s a dividend investor to do? To help us navigate the uncertain waters ahead, Yield Hog spoke to Anil Tahiliani, portfolio manager with McLean & Partners Wealth Management. The Calgary-based firm, which manages money for high net worth individuals, emphasizes mid-cap and large-cap stocks with a history of rising dividends.

“Given the Fed’s decision not to taper, investors will be focused on every piece of U.S. economic data until the next Fed meeting [in late October],” Mr. Tahiliani said. “Dividend income investors should have a well-diversified portfolio with a bias towards pro-growth and cyclical stocks.” With the economy expected to pick up, he’s especially keen on energy- and materials-related stocks that have lagged the market but which have strong balance sheets and positive cash flow. For income, he looks for higher-yield plays that also have growth potential.

Source: Globe and Mail

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