Preserving Income: One Strategy for Protecting Profits and Dividend Yield

As investors start off June processing the fourth consecutive week of losses for major indices and rather weak recent economic data, stock holders should contemplate ways to hedge a portion of their profits (and income) from risk of a second half slowdown. The weak ADP data yesterday confirms that the job market remains challenged and proves that this has been a jobless recovery. Macro Risks Remain Investors have a significant amount of macro risk to consider including: End of QE2 in June 2011 A relatively weak economic recovery Stubbornly high level of unemployment Weak housing market U.S. debt ceiling debates Fiscal issues at the state and local level leading to cutbacks Lingering European periphery credit issues Rise in commodity prices Uncertainty in the Middle East And the list goes on… The equity market has enjoyed a strong run since the lows in March 2009. However, as highlighted in the chart... Read more