Fearful Americans Hoard Bonds, Dividends
While many of these companies have American Depositary Receipts in the U.S., Thornburg owns shares in each company's respective domestic market.
Brady says investors often discount the prospects of telecom stocks because they're growing by 5% to 10%, half the pace of many growth stocks. Yet, many of these names are yielding as much as 10%. "Add those two things together and compound that income over time, and it starts to get pretty interesting," Brady says.
Leaning on income in tough times is a solid defensive strategy, especially with so much unknown in the market. Brady notes that Standard & Poor's was looking for a bigger deal that more concretely addresses spending issues, which could lead to a downgrade of the coveted triple-A rating for the U.S. "To what degree the market penalizes the U.S. for getting downgraded, that remains to be seen," he says.
And with expectations of GDP growth above 3% as stimulus programs expire clearly off the table, Brady wonders how the market will react in the aftermath of incentives that haven't worked."The scariest thing about this discussion is that we're spending a lot more than we're taking in," Brady says. "We've put this massive amount of stimulus in and a really scary thing would be if it was working. We're talking about cutting that back notably, so you'd have a very slow growth economy or in a recession without that government spending. Look at the GDP number from Friday." -- Written by Robert Holmes in Boston.
>To contact the writer of this article, click here: Robert Holmes. >To follow Robert Holmes on Twitter, go to http://twitter.com/RobTheStreet. >To submit a news tip, send an email to: firstname.lastname@example.org.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV