For many sectors, strategies and asset classes, the Federal Reserve’s moves on interest rates over the last few years have had some dramatic effects. With interest rates high, some strategies that were effective during the zero interest rate policy (ZIRP) period in the post-Great Recession world are no longer as effective. Returns for many of these sectors and strategies have fallen flat.
This includes dividend stocks.
With bonds now paying meaningful yields, dividend stocks have long been left in the dust, with investors choosing the safety of Treasuries and cash. But the fortunes may have shifted. With earnings expectations now rising and interest rates falling, the perfect conditions for dividend investing are forming. For long-suffering dividend seekers, we could be witnessing a renaissance of dividend investing.
