Rising Interest Rates A Headwind For Dividend Paying Stocks

As the below table shows, the year to date return of this year's Dow Dogs is significantly underperforming the Dow Jones Industrial Average Index. Not shown below is the YTD return for the S&P 500 Index, but the S&P 500 Index has a small positive return through last Friday's close and the Dow Dogs are underperforming the broader market as well.

Last week the new Fed chairman, Jerome Powell, provided the semiannual testimony on monetary policy. One conclusion taken from his remarks is the Fed likely will be more hawkish going forward, all else being equal. This potential for a continued move higher in interest rates will have a negative impact on the performance of dividend-paying stocks as the year unfolds.

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