“But if, baby, I’m the bottom
You’re the top.”. Cole Porter.
In this month’s reflection section, we noted that March has had more than its fair share of market bottoms or tops. We do not know what will happen regarding tariffs or counter tariffs. Government programs could offset some of the impact as they did during Covid. Interest rates could come down if the economy slows or might rise if inflation spikes. This might be a normal month or it could be a chance to catch a rally or avoid a decline.
We still see value in dividend paying stocks. Some companies will be relatively unscathed by a tariff war, such as the pipelines. Others like the banks will suffer if their customers lose their jobs in steel plants or auto plants. However, the banks have started to build up reserves to cover the fact that many loans could go into default. I am not saying these stocks will not decline if there is a broad market decline but I believe that over time they will continue to thrive and collecting a dividend that is higher than what I can earn on a bank account is not a bad start.
