If you are investment planning in Cheshire or Oswestry, you may be wondering what current market turbulence means for share portfolios. Ken Hall, a writer for The Motley Fool, believes that it could present rewarding opportunities for investors with an eye on the long-term.
The reason for this is that weaker markets offer the chance to identify lower valuation businesses, which might in turn bring stronger dividend yields in the future. It is important not to assume though that every falling stock automatically translates into a bargain, with many destined to never recover their former value.
Hall argues that this is why investors should be prioritising diversified portfolios, which offer dividend durability, strong balance sheets and continued market relevance. For people focused on less cyclical market sectors, many experts believe bread and butter industries such as supermarkets tend to hold their ground when there are disruptions to the wider economy. Hall highlights profitable supermarkets with a healthy market share offering a good dividend yield have proven in the past to be sensible investments.
Even where it falls along with the rest of the market, the dividend yield can still rise, if the payout remains intact. It is worth remembering that there are risks even with established retailers. Grocery retail is fiercely competitive, offering thin margins whilst the sector is not immune to inflationary pressures. Whilst stock market performances are often cyclical, the challenge for investors is in identifying those companies that are able to weather economic shocks.
