3 Strong Dividend Stocks to Buy for Market Volatility and Inflation Fears

3 Strong Dividend Stocks to Buy for Market Volatility and Inflation Fears

Posted On May 14, 2021 1:12 pm

The Nasdaq tumbled 2.6% Monday and was down big early Tuesday, before it recouped most of its decline, as Wall Street sold technology stocks amid renewed inflation worries.

The Nasdaq has slipped below its 50-day moving average and is down 5% from its recent highs. Plus, the Dow posted its biggest one-day decline since late February on Tuesday, while the S&P 500 slipped 0.87%.

The cost of goods continues to climb across a range of areas, with consumer prices up 2.6% in the year ended in March, for the biggest 12-month increase since August 2018. The Fed and some on Wall Street point out that these elevated prices are compared against the early shock of the coronavirus and are made worse by supply chain setbacks amid the economic reopening.

The pent-up demand, mixed with government checks has amplified the situation. Yet the Fed remains steadfast that inflation will be “transitory” and retreat later this year.

Last Friday’s far worse-than-projected jobs report might boost the Fed’s case to continue its easy-money policies. The Fed also committed last summer to a new “average inflation targeting,” which means the central bank will allow inflation to run above its 2% target for some period of time.

All that said, the Dow and the S&P sit just below their records and the Nasdaq is up around 50% in the past year. Therefore, Wall Street is going to continue to take opportunities to pull profits when it can.

Think how quickly the Nasdaq fell into a correction from its mid-February records, only to climb to new highs in late April. Given this backdrop, investors likely want to remain exposed to the market.

Let’s dive into three strong dividend-paying stocks that could be solid near-term plays, as well as long-term holds…

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