UMI - Income Opportunities: Finding Income In An Inflationary Environment

• With the Fed announcing its intent to taper asset purchases and the market expecting possible interest rate hikes as soon as 2022, investors have been looking for a way to find more income in an inflationary environment.
• While negative sentiment related to rising inflation or interest rates can hurt stock prices and temporarily weaken margins, the relative stability of dividend income can help drive a higher total return. The total return for income-oriented indexes has often outperformed the broader market during high-inflation years.
• In contrast to equity dividends, bond coupons are usually paid at a fixed rate - so if inflation increases, the coupon payment stays low.

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