Good evening,
The Federal Reserve just lowered interest rates by 50 basis points (0.50%). So that means we can declare mission accomplished on inflation, right?
Not so fast.
It’s true the rate of inflation is down below 3%. That's still above the Fed’s preferred (and arbitrary) 2% target. And it’s a far cry from the rate of over 9% set in 2022.
But prices are still rising.
It’s important to understand that the Fed cutting interest rates is an inflationary action. That’s because rate cuts are intended to stimulate the economy. The reality of inflation leads to too much money chasing too few goods.
Does this mean that the rate of inflation will shoot back to 9%?
Probably not. But it won’t be surprising if the rate of inflation goes above 3% - and maybe higher.
And investors of a certain age know what happens when you have low interest rates and high budget deficits. That would be stagflation.
And before you bring politics into this, an initial spike seems inevitable no matter who wins November’s election. It’s a math problem at this point.
But there is a way for you to protect your portfolio from the impact of inflation: buy quality dividend stocks. These stocks pay you income on a regular basis that can help you manage through inflation. And if you reinvest those dividends, they can add to your total return, which can help your investments outpace inflation.
As with any asset class, you still want to get the most value for your dollar.
That’s why we’ve created this special presentation. It analyzes seven stocks that trade for less than $20 a share and offer an attractive dividend. More importantly, each of these stocks is in a position to benefit from rate cuts that the Fed says will continue through 2025.
View the 7 Dividend Stocks to Buy Under $20
The InsiderTrades.com Team
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