OT--
Preferred stocks are the stocks that people use as bond substitutes, and they have been taking a beating along with bonds. But people buy stocks for other reasons besides the flow of dividends. If the fed does begin to taper in Sept, it will be because it believes the economy is strong enough to withstand it. It won't be withdrawing all of the stimulus at once, it will be doing it a little at a time, although market participants appear to prefer to think in terms "all or nothing".
If the economy does continue to grow, then many companies will continue to grow their earnings. That is the basis on which many companies trade in the market, not their current dividend rate. At least in the long term. The Big Money people who trade love to have stocks go up and down in big moves, though, that is how they make their big bucks, so I am sure we will be seeing a lot of volatility come September. Up and down. With little regard to actual earnings. Or dividends, for that matter.
Reading people like Tyler Durden (who has been posted here a number of times) is tantamount to reading the list of risk factors in SEC filings. Over and over again. If that is all you read, you will never ever buy a stock. And never ever believe for even a second that anything good can possibly be happening in the economy. Granted Brett Ahrends isn't quite the same as Durden, but he isn't that far off from him either. |
