This Current Market Proves Dividend Investing is Superior

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Last week was one of the worst weeks in the stock market we’ve had all year, given the news that came out regarding inflation. For months, the Federal Reserve has been saying that interest rate cuts are right around the corner, with Jerome Powell saying they anticipate at least three cuts in 2024. The reason for this was because the data showed that inflation was finally cooling down after a rough couple years. However, the news that recently dropped threw a wet blanket on the situation, with new data showing that inflation had begun accelerating in certain areas again. As the market was continuing to move upward, and a lot of the higher yielding asset classes were finally seeing good share price recoveries, the new inflation data put a pause on the recovery of these stocks.

As a result of this data, we saw a number of sectors fall dramatically in share price last week. The Dow Jones fell by 475 on Friday because of the new inflation data, which was in addition to the index falling by 422 points three days earlier. The tech sector also saw big drops, with the poster child for the NASDAQ, Nvidia, also seeing its share price fall. Also taking big hits were materials, healthcare, information technology, and practically every other sector with some exceptions, including a handful of closed end funds. With this most recent data, it now seems like interest rate cuts won’t be happening as quickly as we would’ve liked which is gonna have a major impact on the share prices of most stocks and index funds.