Dividend investing strategies are starting to regain their investor appeal in the current economic environment. Particularly amongst Private Banking clients. Here are the key reasons why:
- Global equity market performance is down around 25% year-to-date (as of 30 Sep 2022).
- 2023 Global economic growth is expected to drop to ~4%, which is one third less than 2021.
- Interest rates are rising across the globe in response to double digit and continuously rising inflation.
This data does not look supportive for traditional Growth Investing strategies. The popular fast growing growth stocks of the bull market relied on cheap easy money and strong macroeconomics. Both of which are currently out of stock globally.
Whilst value investing strategies have staged a strong comeback, the are fundamental differences with dividend investing strategies. These core differences suggest that the outlook for dividend stocks in the current volatile environment is where new money into the equity market may flow.
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