Akane Otani

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1,333 appearances 33 recordings 1 series first heard Aug 2017 last heard Mar 2023

Akane Otani’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Why Dividend Stocks Are Getting More Attention From Investors · 6 May 2022 podcast

And then on the flip side, things that are thought of as being more risky investments, maybe growth stocks, for instance, tech stocks, tend to do well in the opposite environment.

A lot of it has to do with the industries that we're seeing dividend payers represent.

So, for instance, energy has been doing really, really well this year, and that's because oil prices have spiked, particularly as we've seen the Russia-Ukraine war happen.

There's been concerns about disruptions to supply in the global commodities market.

that has really pushed oil prices higher.

And in turn, that's really benefited energy stocks, which happen to be big dividend payers.

So that's one reason why.

And then another reason is just the general fear that we're seeing across the markets.

That's really made a lot of investors gravitate towards more defensive investments, things that they think will hold up even if the economy will slow down later this year.

So that's why we're seeing

Names like Coca-Cola, Johnson & Johnson doing much better than the broader market this year, which is sort of a reversal from much of what we saw in 2021.

It's interesting because usually we actually see dividend stocks do worse than the broader market when interest rates rise.

And that's because usually interest rates are rising because investors are anticipating faster economic growth in the future.

And so when you're looking at the potential for a lot stronger economic growth down the line, investors usually are more willing to pay a premium for stocks that they think are going to benefit from that growth.

Things like banks, for instance, industrial stocks, manufacturers, things that tend to be sensitive to changes in the economy.

Those types of names will often do better than dividend paying stocks, which are seen as being a bit more defensive.

But at the moment, we're actually seeing dividend paying stocks doing better because

interest rates aren't necessarily rising because people are pricing in faster economic growth in the future.

The big reason why we've seen yields rise so quickly this year is actually because of the Fed and because it's had to move so quickly to try to rein in inflation, which is currently running at a four-decade high.

So because we're seeing a different reason for the rise in interest rates this year, that's actually benefited dividend-paying stocks in a way that usually we don't see happen in a rising rate environment.

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