Time to Rotate to High-Yield Services Stocks?

Recently we argued that defensive investing with high-dividend-yielding Industrials may be a better strategy for the near future. Although defensive investing in some sectors doesn't usually bring in the best returns in bull markets, investing with a margin of safety can be highly valuable in down markets. The same strategy can be applied to other sectors, such as the Services sector. Since last year, the risky services stocks with low dividend yields performed better than the defensive services stocks with high dividend yields. However, defensive stocks are generally safer and provide better protection in down markets. We believe investors should be cautious about the upcoming inflationary environment. As we are concerned about the Fed's loose monetary policy, we think investors should pick defensive stocks with high dividend yields in order to protect themselves against inflation. We compiled a list of the top 30 S&P 500 Services Stocks (The sector classifications... Read more