Finally, there’s good reason to get bullish on dividend stocks. Plus, what investors should do before capital gains taxes go up
If the central bank follows this rate decision with more rate cuts later in the year, as the threat of inflation subsides or economic clouds gather, all the better. The S&P 500 High Dividend Total Return Index – which tracks the performance of 76 stocks, including Duke Energy Corp. – has delivered a total return of 1 per cent over this same two-year period. The index has trailed the S&P 500 by 34 percentage points.
Now, some market watchers expect that these trends will start to move in reverse: Rate cuts will make dividends look more attractive relative to bonds and GICs, underpinning a rebound.In several reports on dividend stocks this year, Bank of America strategists argued that dividend stocks are cheap and unpopular among investors, making them a compelling bet on rebounding sentiment alone.