Thursday’s market selloff once again proved the value of some of the biggest, most boring, high-yield dividend stocks. Indeed, while the Dow Jones Industrial Average was plunging as much as 180 points early in the session, a number of big dividend stocks with high yields and low volatility were actually putting up gains.
As the latest bout of market panic revealed, investors don’t just scurry for the safety of Treasuries and gold in a selloff. Dividend stocks with little volatility — that is, low-beta dividend stocks — are also a port in a market storm. That’s why it’s imperative to allocate a part of your equity holdings to big, low-beta dividend stocks with high dividend yields. These are the stocks that are going to provide ballast when the market finally blows off steam.
And blow it will. The S&P 500 has now gone more than 1,000 days without a 10% correction. Stocks are simply way overdue for a big pullback.
As we noted, the crisis in Portugal is an unusual suspect for a market correction, but that doesn’t mean the slide hasn’t begun. There’s just no way to tell. Corrections can’t be timed, but they are inevitable.
Bottom line: The correction is coming. It may even be here. And low-beta dividend stocks with high dividend yields are going to hold up much better than the overall market when it hits. To get an idea of where to seek safety from the correction, here are five big, low-beta dividend stocks with high dividend yields that rose when the market was plunging Thursday: