Dividend stocks have some bond-like characteristics. Firstly, since dividend stocks tend to be defensive in nature, they give you a cushion during risk-off scenarios while underperforming during risk-on scenarios. Secondly, they offer regular income in the form of dividends or coupons.
The S&P 500 (SPY)(IVV) has a correlation of +0.11 with bonds. The utility sector has a higher correlation of +0.28. The telecom and consumer staples sectors have respective correlations of +0.21 and +0.17 with AGG, which are higher than the correlation between AGG and SPY. So, as interest rates rise, dividend stocks are likely to underperform the S&P 500 along with bonds.
Source: Market Realist
Related Articles:
- What's Your Retirement Vision?
- Stock Dividends - The Gift of Nothing
- What's More Powerful Than Compound Interest?
- Dividends vs. Stock Buybacks
- 5 Lessons Learned About Investing In Dividend Growth Stocks
Dividend Growth Stocks News
- Top Wall Street analysts prefer these dividend stocks for stable returns - CNBC - 5/18/2025
- Tesla Started the Ball Rolling and It Could Mean a 9,000% Growth Driver for These 3 Dividend Stocks - Yahoo Finance - 5/17/2025
- These 2 Dividend Stocks Also Happen to Be American Companies (Somewhat) Insulated From Trade War Troubles - The Motley Fool - 5/18/2025
- 2 Dividend Stocks I’m Wildly Bullish On - Seeking Alpha - 5/18/2025
- I asked ChatGPT to suggest 3 UK dividend stocks for further research. Here’s what it said - Yahoo - 5/17/2025
- Automatic Data Processing Inc. (ADP) Dividend Stock Analysis - 5/16/2025
- Air Products and Chemicals Inc. (APD) Dividend Stock Analysis - 5/9/2025
- Waste Management, Inc. (WM) Dividend Stock Analysis - 5/2/2025
- Wal-Mart Stores, Inc. (WMT) Dividend Stock Analysis - 4/25/2025
- Abbott Laboratories (ABT) Dividend Stock Analysis - 4/18/2025
Why Do Dividend Stocks Sometimes Behave Like Bonds?
Posted by D4L | Friday, July 31, 2015 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.