If investors expect interest rates to hold until next year, they should consider dividend-yielding stocks like Altria (NYSE: MO), Bristol Myers, and Pfizer (NYSE: PFE), which offer reasonable values and attractive yields. Fixed-income investments, such as 5% CDs or money markets, will likely remain popular, especially among those nearing retirement, providing stable returns without shifting money into the stock market.

Transcript:

Exactly right. If you’re an investor and you think they’re going to hold all the way to next year, what do you want to own?

If you say, okay, that’s what’s going to happen. What do you want to own? It can be fixed income or stocks. What are your picks?

Well, I think buying, and we write about this a lot at 24-7, buying dividend-yielding stocks, especially the stocks like we’ve discussed, like Altria and even Bristol Myers, which yields almost 6%, and Pfizer and things like that.

When interest rates do start to roll over, those stocks will come back into fashion like they were when interest rates were zero and 25 basis points. So I really like dividend yielding.

Because most of those are still trading at reasonable values. So dividend-paying stocks of quality companies, I think, make sense.

I would assume that, look, at 5%, a lot of people are going to still keep money parked where they can get 5%.

To me, though, that’s the money that’s not going to move into the market. I think that money stays where it is. Do you?

No, I agree. And I can speak from experience.

As you move away and get older and you’re counting more on retirement funds or things like that, seeing a 5% CD or 5% daily liquidity money market is like a free gift from somebody dropping off money on your front porch.

So yeah, I don’t think a lot of that money is going to come out.

No.

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