Traders work on the flooring of the New York Stock Exchange (NYSE) in New York City, U.S., June 30, 2022.
Brendan Mcdermid | Reuters
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A majority of Wall Street traders imagine the market stands just about useless in the water for the rest of 2022 and, because of this, suppose it is time to purchase dividend-paying stocks, in accordance with 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 mentioned stocks paying excessive dividends. Less than 18% mentioned they’d purchase megacap tech stocks proper now.
Unlike development stocks, dividend stocks usually do not supply dramatic worth appreciation, however they do present traders with a secure 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 12 months, with the S&P 500 on tempo to wrap up its worst first half since 1970. Investors worry that the Federal Reserve will maintain mountaineering 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 document excessive reached in the first week of January.
Forty % of the survey respondents imagine the S&P 500 might finish the 12 months above 4,000, which represents a 6% acquire from Thursday’s intraday degree round 3,767 however nonetheless effectively beneath the place it began the 12 months at 4,766. Only 5% suppose the index might finish the 12 months 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 to engineer a so-called “soft landing,” the place development slows however would not contract.
Druckenmiller, for instance, mentioned the bear market has a methods to run, whereas Cooperman not too long ago known as the S&P 500 to drop 40% from peak to trough and predicted a recession subsequent 12 months.
When requested what their most secure play is correct now, half of the respondents mentioned money. Fifteen % selected actual property, whereas 13% mentioned Treasuries have the lowest threat.