2 High-Yield Dividend Stocks That Can Safeguard Your Portfolio Against a Market Crash
Stock market corrections are part and parcel of the investing process. As such, investors shouldn't get too worked about this inevitability. The current market, though, is starting to show ominous warning signs about a potential downturn. Valuations across the large cap space appear to be stretched in many instances, with 44 large cap equities trading at over 50 times forward-looking earnings right now -- 45 of which are valued at more than 100 times next year's earnings. Moreover, inflation hit a three-decade high in the U.S. last month. The Fed, in turn, may be forced to raise interest rates soon, which is potentially bad news for stocks, as rock-bottom interest rates have been one of the main drivers behind this record-breaking bull market.
What should investors do to prepare for a possible market correction in the coming months? Blue chip stocks that offer higher-than-average dividend yields could prove to be a viable safe haven for investors in the event of a marketwide downturn. Keeping with this theme, the healthcare giants AbbVie (NYSE: ABBV) and Gilead Sciences (NASDAQ: GILD) both sport handsome dividend yields, well-rounded product portfolios, and valuations that are downright bargains relative to their large-cap peers. Here's a brief rundown on the pros and cons of these two defensive-oriented high-yield dividend stocks.
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Source Fool.com