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Sunday, October 9, 2011

best strategy in volatile stock market

best strategy in volatile stock market : The stock market volatility of the past several months looks like it could stick around for a while, forcing investors to be ever more vigilant about how to position their portfolios.

Dividend-paying stocks are one of the more popular recipes for coping with uncertainty. U.S. companies are hoarding cash, making quarterly dividend payments to shareholders currently a much more reliable source of returns than capital appreciation.

Yet rapid sentiment shifts and potential bursts to the upside could leave buy-and-hold dividend investors flat-footed.

The better course is to be tactical in your stock allocation, say analysts, taking tax losses in cyclical sectors that suffer the most in a bear market and investing the proceeds in more defensive sectors, such as health care and consumer staples. Stocks in these sectors tend to have lower betas, a measure of how closely an investment's return matches that of the market,Food stocks, a subset of the staples sector, are another area that tends to hold up through tough times, For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today

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