(This was originally published in the March 2017 version of The Dividend Growth Newsletter. It is available here.)
Donald Trump has been called many things since assuming office. Most are critical of his methods and choices, and his waning popularity is a symptom of that. But here’s another word: tiresome.
Trump has been in office less than four months, and yet Barack Obama’s presidency feels like it’s in the distant past. The 24/7 news cycle is ruthless; Trump is polarizing, if anything, and no other president has ever felt so pervasive. I mean, has the failure of any TV show ever been singularly attributed to the President of the United States?
Trump’s lack of political experience is hampering his ability to deliver on his promises, especially when it comes to big tax cuts. The S&P 500 jumped eight points the day Trump was sworn in, and over the next two months climbed to almost 2,400 points, an all-time high. The Dow saw a similar spike, reaching an all-time high in early March. Optimism has waned, however, and over the past month, both indices have pulled back, declining roughly 1 per cent and 1.5 per cent, respectively. The status quo has changed from a corporate-friendly administration to one that may be impeached.
In this type of environment, stable dividend stocks seem all the more logical and worthwhile. Stock prices can be difficult to stomach, but these are companies that have weathered all kinds of presidents, and continue to deliver predictable dividend increases and yields.