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A majority of Wall Avenue traders consider the market stands just about lifeless in the water for the rest of 2022 and, because of this, assume it is time to purchase dividend-paying stocks, in response to the new CNBC Delivering Alpha investor survey.
We polled about 500 chief funding officers, fairness strategists, portfolio managers and CNBC contributors who handle cash about the place they stood on the markets for the rest of 2022. The survey was performed this week.
When requested “what are you most likely to buy now?,” 42% of respondents stated stocks paying excessive dividends. Lower than 18% stated they might purchase megacap tech stocks proper now.
In contrast to progress stocks, dividend stocks usually do not supply dramatic value appreciation, however they do present traders with a steady supply of earnings throughout instances of uncertainty. A dividend is a portion of an organization’s earnings which can be paid out to shareholders.
The market has had a tumultuous yr, with the S&P 500 on tempo to wrap up its worst first half since 1970. Investors concern that the Federal Reserve will preserve mountain climbing charges aggressively to tame inflation, at the threat of inflicting an financial downturn. The fairness benchmark has tumbled right into a bear market, down greater than 20% from its file excessive reached in the first week of January.
Forty % of the survey respondents consider the S&P 500 may finish the yr above 4,000, which represents a 6% achieve from Thursday’s intraday degree round 3,767 however nonetheless effectively beneath the place it began the yr at 4,766. Solely 5% assume the index may finish the yr above 5,000.
Many notable traders, from Stanley Druckenmiller to David Einhorn to Leon Cooperman, have been skeptical that the central financial institution will be capable of engineer a so-called “soft landing,” the place progress slows however does not contract.
Druckenmiller, for instance, stated the bear market has a methods to run, whereas Cooperman lately referred to as the S&P 500 to drop 40% from peak to trough and predicted a recession subsequent yr.
When requested what their most secure play is correct now, half of the respondents stated money. Fifteen % selected actual property, whereas 13% stated Treasuries have the lowest threat.
