Investors telegraphed mixed feelings about the U.S. economy Wednesday.
The Nasdaq edged 0.2% higher to 9,910, largely on the back of tech and tech-related stocks including Netflix (NFLX, +2.7%) and Amazon.com (AMZN, +1.0%). However, stocks that are more reliant on states reopening and people coming out of their homes – such as energy firms Chevron (CVX, -2.7%) and aircraft maker Boeing (BA, -2.6%) – finished the day with solid losses.
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That held back the Dow, which finished with a 0.7% loss to 26,119. The S&P 500 also finished in the red, off 0.4% to 3,113. Taking a more substantial hit was the small-cap Russell 2000, whose smaller components tend to derive most if not all of their revenues domestically. That index fell 1.8% to 1,426.
The losses seemed to reflect a lack of confidence in a perfect V-shaped economic recovery – a fair stance given that Texas, Florida and Arizona saw record one-day increases in COVID-19 cases yesterday.
One of the few things that seem certain, however, is continued low interest rates. The Fed’s so-called “dot plot” released last week suggests that the Fed’s benchmark rate could stay near 0% through at least 2022, and Fed Chairman Jerome Powell’s comments Tuesday about “significant uncertainty” around an American economic bounce-back reinforced that outlook.
That means tough goings for investors looking for yield in bonds or CDs, but don’t fret: The market isn’t completely out of attractive income choices.
Indeed, we recently reviewed 32 different ways of securing yields of up to 9%, depending on how much risk you’re willing to absorb. Dividend safety should be on your radar, too. Monthly payouts are useful, but they need to be durable, like these 11 dividends. The same goes for high-yield stocks.
Another way to dial down the chances of a juicy dividend suddenly drying up is to buy bundles of high yielders in a diversified fund. These five funds offer just that: yields of 4% or more, with risk spread across dozens if not hundreds of holdings.
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