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How Interest Rates Affect Dividend Paying Stocks

The inflationary and interest rate environment has changed quite a bit from what it looked like back in January of this year. When we entered 2022, the average yield of the 10-year Treasury was a modest 1.67%, while inflation was climbing fast at 7.5%. Today, both figures have risen to even greater heights, with the 10-year Treasury hitting 2.8% and inflation outpacing those rates at 9.1%.

When it comes to dividend-paying stocks, both inflation and interest rates play a huge role in determining their value to investors. Inflation, in particular, creates a number of challenges that investors will need to properly navigate in order to remain profitable.

One can’t talk about interest rates without taking into account inflation, since the two metrics are strongly correlated and dependent upon each other. And the role that dividend-paying stocks play in this kind of environment changes.

Be sure to check our Portfolio Management Channel to learn more about different portfolio rebalancing strategies.

Inflation, Interest Rates and the Impact on Markets

Dividend Stocks and Sectors to Prioritize

Final Considerations