Dividends4Life: 3 Dividend Stocks That Will Thrive As Interest Rates Rise

Dividend Growth Stocks News

You can take it to the bank: interest rates are going up. Everyone from Janet Yellen to Donald Trump says it needs to happen. Traders betting through the Fed futures markets agree. More hikes seem likely next year, if oil prices keep rising, taking inflation along with them. Since higher rates are bad for high-yield assets, does this mean it’s time to give up and accept that 2% dividends are the only income you can expect in this market? No way. Because there’s an easy way we can protect ourselves from higher rates and still collect a nice 6.8% dividend yield. It involves buying three often-overlooked investments I’ll show you in a moment. Together, they form a broadly diversified portfolio that gives you reliable downside protection in case our overheating stock market decides to slide.

To build a portfolio that will withstand higher rates, I’m going to choose a floating-rate business development company (BDC), a hedged bond fund and a floating-rate bond fund. All four have one thing in common: they’re high-income assets that will not go down when rates rise, and can actually go up. Dividend Stocks That Will Thrive As Interest Rates Rise: Pennantpark Floating Rate Capital Ltd (PFLT), ProShares High Yield Interest Rate Hedged (HYHG) and Pioneer Floating Rate Trust (PHD).

Source: InvestorPlace

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