U.S. banks that pass their next stress tests will be allowed to raise their dividends after June 30, the Federal Reserve said today, March 25. The Fed will also lift any remaining restrictions on stock buybacks.
Hedges that can pay off on the downside and the upside are the most useful and most valuable. They also tend to be relatively rare. There aren’t a lot of these bets floating around in most markets just waiting for you to snap them up. However, I have found two hedges of just this sort in today’s market that I’m going to recommend to you today. (In this post I’m going to give you some of the nitty gritty numbers that support my recommendation for these two hedges. If you want to see some charts for copper and gold, banks and bonds check out the video I posted today.) I’m going to add these new recommendations to my standing Special Reports post tomorrow.
2021 is shaping up as an especially challenging year for investors. Much, much more challenging than 2020. I don’t think we can count on this rally running uninterrupted through the year. That would be simple, wouldn’t it? We’d all know how to profit from that scenario. And I don’t think the market is about to drop off a cliff from its current record highs. That would be traumatic. But, still, we do know how to protect a portfolio in that scenario. And even how to profit from a prolonged plunge–if we can bring ourselves to place those short and Put Options bets. Instead 2021 is likely to be one of those years with a Rally Stage and then a correction (or “something”) to be followed by a last quarter of 2021 that is, at this moment, close to completely unpredictable. That would make 2021 one of those years that gives investors a chance to be wrong several times over, to botch timing on the upside and the downside, and to let emotions power some really bad investment moves. I don’t pretend that I’ve got this year’s market stages down perfectly–although I think the outlines for the first two stages for 2021 are pretty clear. I don’t imagine that I’ve got the timing for navigating these stages clocked perfectly–although I do think I understand “generally” when the market is likely to switch gears. And that lets me lay out for you a likely pattern for 2021 and to suggest stocks and ETFs to use to navigate this year. Part of the point in getting as specific as I can at this point isn’t that I expect that I’ve got everything right, but to lay out concrete markers that will let you and me adjust portfolios as the year progresses. I’m dividing this Special Report into three parts.
It’s unusual, to say the least, to have a dividend portfolio match the returns on the Standard & Poor’s 500–especially in a year when the S&P 500 was setting an all time high–but that’s what happened in 2020. My Dividend Portfolio showed a price gain of 12.28% for 2020. Add in the 3.43% dividend yield and the total return for the portfolio for the year was 15.71.%Â For the year the S&P 500 returned 16% and the Dow Jones Industrial Average returned 7%.
Nothing like a little $125 million investment from an outside party to validate a joint venture. Fluence, a global battery storage joint venture of Siemens (SIEGY) and AES (AES), has reached an agreement with the sovereign wealth fund of Qatar for a $125 million investment. The funding will give the Qatar Investment Authority a 12% stake in Fluence and values the battery company at more than $1 billion.
Dividend Stock Portfolio member CVS Health (CVS) has set  December 21 for the start of its program to vaccinate residents of long-term care facilities with the Pfizer (PFE) vaccine expected to be approved today for emergency use.
Dow (DOW) certainly fits the dividend template that I’ve explained in my Special Report: “10 Dividend Stocks that are beating the risky rockets. The stock yields 5.26% after a 0.20% gain today December 9. That compares to a yield of just 2.8% in July 2017 and 3.1% in December 2016. The stock also shows a 1.06% price to sales ratio on today. I think we’re looking at a cheap stock. Tomorrow I’l be adding it to my Dividend Portfolio.
I’m adding Citigroup, the most recent pick in my Dividend Stocks Special Report, to my Dividend Portfolio tomorrow
For 2020 as of the close on December 1, the total return for Dividend Portfolio was 14.19%. The dividend yield, so far, works out to 2.96%. That’s deceptively low, however, since most of the stocks in the portfolio haven’t completed their dividend payments for the year.
In 2018 my Dividend Portfolio showed a yield on 3.60%. That produced $6,483 in dividend income that year. The goal of this portfolio is to beat the yield on the 10-year Treasury. On January 1, 2018 the yield on the 10-year Treasury was 2.58%. In 2019 my Dividend Portfolio showed a yield of 4.90%
Last night, I made Duke Energy (DUK) my second pick in my Special Report: “Dividend Stocks that are beating the Risky Rockets.” Today November 19, I’m adding these shares to my Dividend Portfolio.
