There have been a few major themes that drove the market last year and into 2020. One of the biggest continues to be the Federal Reserve and its pace of rate cuts. After raising rates for the first time since the Great Recession, Jerome Powell and his team have dramatically reversed course, cutting rates several times over the course of the year. This set off a big market rally as the access to cheap and easy credit fueled stock buying.
And this has been a boon for dividend investors.
High yielding sectors like real estate investment trusts (REITs), master limited partnerships (MLPs), and utilities were once again on the menu and not only provided strong dividend income, but capital appreciation as well. Meanwhile, investors have continued to flock to dividend growth stocks to gain access to increasing yields as well. The halcyon days for high yielders were back.
The problem is, we may not see a repeat in the new year.
While there have been a few wrinkles, the Fed has continued to keep its patient stance and signaled that there will be no rate cuts this year. That means dividend investors may not see the kinds of returns this year that they realized throughout 2019.
Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary rating system. Go Premium to find out the entire list.
