This Proven Strategy Will Keep Investors in the Game For 2023

Some traders are betting the worst is over for markets. That’s based on the view that the Fed will start tapering its interest rate hikes. But as long as interest rates are being hiked, they’ll continue to weigh on stocks.

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  • For investors who don’t want to get whipsawed while this plays out, there are a number of investment strategies to focus on instead. The simplest and arguably best is simply to buy and hold dividend-paying stocks in industry-leading companies.

    While such a strategy seems boring in a bull market, in a bear market it plays out well. For instance, beverage giant Coca-Cola (KO) is up nearly 20 percent in the past year alone. The stock has far lower volatility, and it pays a modest dividend of 2.8 percent. But that dividend has been increased annually for decades.

    Action to take: With earnings and revenue up by double-digits in the past year, it’s clear that this dividend payer can deliver on some growth as well as income. Investors may want to buy some shares now, and try to buy some on any drop in shares of over 10 percent in the coming months.

    For traders, the stock can sometimes be prone to big swings. It’s on an upswing now. The February 2023 $65 calls, last going for about $1.82, can potentially see a swing higher in the mid-double-digit range before expiration.

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    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.