In the last six months, the markets have been booming. The rate of inflation is slowing down, the Federal Reserve is anticipated to slow down its own rate of interest rate increases, tech companies are soaring thanks to AI, and overall, the S&P 500 index saw gains for five straight months through the end of July.
The federal government’s financial situation is likely to worsen over the next three years, according to a downgrade of the US government’s credit rating from AAA to AA+ announced by Fitch yesterday. They stated explicitly that “the repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management.”
Investors are starkly reminded by the credit rating downgrade that the US government is over $31 trillion in debt.. During the previous debt ceiling fight, the White House warned that the stock markets could crash if the government were to default. Following the announcement, stocks fell, and now “debt” is the word on everyone’s lips.
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High-Yield Treasures
Investors are seeking safer investments in reaction to the uncertainty, and defensive equities are becoming more popular. High-yield dividend stocks become a desirable option since they offer a stable income stream and some protection against share depreciation.
In light of this, several Wall Street experts have recommended two dividend companies with 12% yields. We looked into the specifics of these two using the Tip Ranks database to see what else makes them worthwhile purchases.
Dynex Capital is the first up, a real estate investment trust (REIT) that specializes in mortgage securities and loans. The firm uses leverage to engage in these assets, investing in commercial mortgage-backed securities as well as agency and non-agency mortgage-backed securities.
Additionally, Dynex has a number of “legacy” investments in its portfolio, including securitized loans for single-family homes and businesses that it created in the 1990s.
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Source: yahoo
