As markets swerve, a preoccupation with income permeates all asset classes

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Last Updated on July 31, 2022 by Bitfinsider

As risk appetite has fluctuated this year, there has been a rising preference for stable income streams behind the scenes of the most recent stock market recovery.
Three dividend-focused ETFs are among the top 10 in terms of stock inflows in the $6.6 trillion exchange-traded fund market, according to data gathered by Bloomberg. Only five outflows have been reported this year for the top, the $36.5 billion Schwab US Dividend Equity ETF (ticker: SCHD).

The largest two-day surge in history following the Federal Reserve’s rate decision is viewed cautiously in light of the demand for reliable payouts and coupon-clipping. Even though Fed Chair Jerome Powell hinted on Wednesday that future rate increases would be more gradual, detractors fear that persistently high inflation will block a change in course and plunge the economy into a recession. According to Max Gokhman of AlphaTrAI, it makes sense to be cautious in this situation.

The S&P 500 has increased 9 percent in July, putting it on pace to have its best month of gains since November 2020. Despite this, the index is still down 13 percent for the year. Recently, traders have been encouraged by strong earnings, but a possible US recession and the direction of the Fed’s rate hikes have kept markets on edge.

Some investors find bonds more tempting due to the volatile nature of stocks. The S&P 500 “pays out” roughly 4.8 percent in earnings, compared to the average yield on investment-grade bonds at 4.35 percent at the moment. That difference is nearly the narrowest since 2010.

According to Karissa McDonough of Community Bank Trust Services, investors don’t even need to “dive down” in quality for worthwhile returns because investment-grade bonds are yielding relatively high rates compared to much of the past decade. Given the current level of recession anxiety, that is an appealing concept.


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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.


Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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