ROCHE HOLDINGS AG SPN ADR EACH (RHHBY) stock forecast and price target

In this edition, railroads may be in for a bumpy ride; ESG has some opportunities; biotechs innovate; and Constellation Brands, Autodesk, and Tencent.

In this edition, railroads may be in for a bumpy ride; ESG has some opportunities; biotechs innovate; and Constellation Brands, Autodesk, and Tencent.

For over a month, we have used this space to alert readers to deteriorating sentiment among corporate insiders (from weakening to jaw-droppingly awful). During the time we have commented on the alarming sentiment, the Dow Jones Industrial Average has fallen more than 6% and a seemingly non-ending list of events has spooked investors. But is enough now enough?

For our list this week, we are focusing on the Healthcare Sector, which we rank as one of our favorites with an Over-Weight rating. Healthcare was an outperformer in 2022, falling only 4% while the S&P 500 dropped 19%, but has lagged in the early weeks of 2023. We think the recent relative weakness may offer a buying opportunity. Post-COVID, consumers are more willing to spend on lifestyle enhancements along with necessary spending on life-saving treatments. In addition, the survival of the Affordable Care Act has kept the ranks of insured U.S. citizens above the historical average, further increasing consumer spending on healthcare services and products. Meanwhile, companies with experience in diagnostic testing, vaccines, and antiviral medicines, as well as suppliers of protective equipment and other hospital products, have benefited from efforts to contain the pandemic. The sector accounts for 14.7% of the S&P 500, and includes companies in the pharmaceuticals, medical devices, healthcare services, and insurance industries. Here's our list of Argus BUY-rated Healthcare stocks that are large-cap and have solid books. We sorted by the largest percentage from the 52-week high.

Global stocks are on a run. While the S&P 500 has jumped almost 8% year-to-date, The EAFA Index of large- and mid-cap stocks based in countries other than the U.S. and Canada has risen 9%. Over the past six months, foreign stocks also have outperformed, climbing 11% versus a 1% decline by the U.S. market. The story is different over the past five years, as the S&P 500 has risen 50% and global stocks have fallen 1%. Even so, the long outperformance has given global stocks a valuation advantage, particularly in the area of dividends. The EAFE dividend yield of 2.7% is 100 basis points higher than the comparable S&P 500 dividend yield. We think global dividend stocks now offer opportunity, particularly given the endless speculation over the direction of interest rates in the U.S., which has created market-timing headaches for equity income investors - who have endured recent wide swings in prices for rate-sensitive equity sectors such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S. interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection, robust industry diversification, and, as we have mentioned, higher yields and lower valuations. Argus recently boosted its global coverage, and recommends the following international dividend stocks, each of which has at least a long-term BUY rating from an Argus analyst. This list of approximately 25 companies offers exposure to eight of the 11 major industrial sectors. The list includes companies from 10 countries.

Healthcare is a sector that includes many categories and investing disciplines. It is innovative, can be either growth or value, and can involve start-ups or mature companies. A healthcare company can be built around one product that is leveraged in broad and creative ways, or a company with depth, breadth and products that have many touchpoints. Many of the companies are truly science-based, some with managers who are stronger as scientists than as executives running a company; others have scientists focus on science while practiced managers mind the books. The Healthcare sector accounts for 15% of the S&P 500, with an overall market cap of $1.4 trillion dollars. Subsectors include Biotechnology, Healthcare Distributors, Healthcare Equipment, Healthcare Supplies, Life Sciences Tools and Services, Managed Healthcare, and Pharmaceuticals. We think investors should Over-Weight the sector and consider allocating about 15% of their diversified portfolios to stocks in the sector. Healthcare is slightly outperforming the S&P 500 thus far in 2022, with a loss of 14% compared to the 25% loss for the S&P 500. The following are some Argus BUY-rated Healthcare companies. The stocks were selected using the Argus screening tool and the following criteria: BUY-rated; large-cap (greater than $8 billion market capitalization); a Financial Strength rating of Medium-High or High; and paying a dividend. We feel these companies currently are best in class for the sector. Some are also part of our model portfolios (Growth & Income, Equity Income, Growth, and Institutional).

As global markets stumble along with rising inflation and the Russian invasion of Ukraine, one thing has not changed: U.S. stocks are more expensive than global stocks on numerous valuation metrics. The P/E ratio on the S&P 500 is 18x, above the global average of 13x and well above the 10-12x average P/Es for emerging markets stocks. A review of price/sales ratios tells a similar story. The U.S. ratio is 3.0x, far higher than the global average of 1.7x, while China appears to be a deep value at 1.1x. Yields are only slightly different. The current dividend yield for the S&P 500 is 1.5%, versus the global average of 2.0% and Europe's yield of 2.8%. One reason investors pay a higher price for North American securities is the transparency of the U.S. financial system. What's more, global returns can be volatile across individual countries, given currency, security, political, and geopolitical risks: indeed, U.S. stocks are outperforming EAFE YTD in 2022 -- as well as over the past five years. Even so, we recommend that growth investors have approximately 8%-10% of their equity allocations in international stocks to take advantage of the value, and we have been adding global stocks to our Universe of Coverage.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based income investors have experienced a high degree of volatility in recent years, as the Federal Reserve since 2018 has embarked on two campaigns to raise interest rates, sandwiched around a desperate program that lowered the federal funds rate to zero in order to help the economy recover from the pandemic. The endless speculation over the direction of rates has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity sectors such as Utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection, robust industry diversification, higher yields, and lower valuations. Argus has recently boosted its global coverage, and recommends the following international dividend stocks. Note this list of 25 companies offers exposure to eight of the 11 major sectors. The list includes companies from 10 countries.

Rapidly rising inflation in 2022 has knocked the stock market into a bear market. While growth strategies have suffered the most, value strategies also have declined. Even year-to-date bond prices are lower. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was much higher than the current 3.0% level. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

Second-Quarter Earnings Season: First Look

In this edition, Skyworks soars, Big Biopharma builds immunity to headwinds, and Baidu and the cloud; and Harmonic Drive Systems, Elekta, and Nabtesco.

As global markets stumble along with rising inflation and the Russian invasion of Ukraine, one thing has not changed: U.S. stocks are more expensive than global stocks on numerous valuation metrics. Consider P/E ratios. The trailing P/E ratio on the S&P 500 is 26x, above the global average of 18x and well above the 14-16x average P/Es for Chinese and LatAm stocks. A review of price/sales ratios tells a similar story. The U.S. ratio is 3.0x, far higher than the global average of 1.7x, while China appears to be a deep value at 1.1x. Yields are only slightly different. The current dividend yield for the S&P 500 is 1.3%, versus the global average of 1.6% and Europe's 2.6%. One reason investors pay a higher price for North American securities is the transparency of the U.S. financial system. What is more, global returns can be volatile across individual countries, given currency, security, political and geopolitical risks; indeed, U.S. stocks are outperforming EAFE YTD in 2022 -- as well as over the past five years. Even so, we recommend that growth investors have approximately 12%-15% of their equity allocations in international stocks to take advantage of the value, and we have been adding global stocks to our Universe of Coverage.

Market Seeks Footing amid Interest Rate Turbulence

Investors have endured a painful start to 2022, with inflation fears, Fed uncertainty, and the Russian invasion of Ukraine. Year-to-date, the S&P 500 has declined 8.0%. Historically, March had been a good month for the markets -- prior to 2020. The average gain for the S&P 500 in the month of March since 1980 is now 0.9%, after the COVID-induced decline of 12.5% in 2020. March is in eighth place in terms of average monthly gains, with a winning percentage of 62%. We note that market returns in March have exceeded 4% on seven occasions since 1980, including a 4.2% gain in 2021 on COVID-19 vaccination progress and a 6.6% advance in 2016 as the market was beginning to recover from the oil plunge of 2014-2015. But there have been some clunkers, including 1980 (-10%), 2001 (-6.4%), 1994 (-4.5%), 1997 (-4.3%), 1988 (-3.3%), and 2020. March is generally a quiet month on Wall Street, as the fourth-quarter earnings reports are finished. Without profits to review, investors will be paying very close attention to economic events, including the Consumer Price Inflation report this Thursday, as well as the Federal Reserve's two-day meeting and developments in Ukraine. We hold on to our forecast for a positive year for the S&P 500, but with returns below the historical average.

The onset of the coronavirus in 2020 knocked stocks into a bear market. Though equities have recovered, the U.S. economy is about to slow down and COVID-19 cases are rising again as virus variants spread. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Daily prices can swing wildly, as they did in January 2022 when the S&P 500 fell 5%. Is it time for investors to cash in their chips? Perhaps not yet. We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was not sub-2.0%. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods. We have designed a portfolio of companies followed by Argus Research analysts that are BUY-rated and have impressive Min Vol characteristics of low beta, high yield, high market cap, strong balance sheets and low risk profiles. Here are some of the stocks featured in the portfolio.

The onset of the coronavirus in 2020 knocked stocks into a bear market. Though equities recovered, the U.S. economy is about to slow down and COVID-19 cases are rising again as virus variants spread. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Daily prices can swing wildly, as they did three times in 2021 when stocks dropped 4%-5% in a matter of a few days. Is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was not sub-2.0%. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

While stocks continue to trade downward, insider sentiment remains generally benign. Indeed, the overall Insider Index from Vickers Stock Research is resting at its most-attractive level since November 2020. Broadly speaking, insiders have maintained a sense of calm during the selloff, with data from Vickers suggesting no panic. Still, despite the unthreatening sentiment and the reduction in stock multiples, there is also no evidence that insiders have started to 'buy the bottom.' We'll watch carefully for any signs that insiders are ready to jump in -- but also note that many of these investors are currently sidelined by trading restrictions that are in place during earnings season.

In our view, the Life Sciences segment of the U.S. Healthcare industry is poised for strong growth over the next few years. This is the part of the industry that is developing the next generation of gene therapies, oncology biologics, and vaccines. Gene therapy holds promise for many diseases, but today serves only as an alternative treatment for some rare diseases. After a period of stagnation, gene therapy has experienced a renaissance, due largely to significant advances in technology and manufacturing scale. Scientists have developed safer, more-efficient viral vectors with better targeting capability. As such, the future for gene therapy appears bright. Currently, there are approximately 400 ongoing gene-therapy clinical trials, and we expect to see new gene therapies gain regulatory approval in the years ahead. This is critically important for patients and patient communities who are waiting for therapeutic advances to treat unmet genetic diseases. In the Argus Universe of Coverage, the following companies are among those that are involved in this part of the Healthcare market. All of them carry an Argus BUY rating.

This edition features the continuing shift to software; biopharma capital allocation; rising ransomware attacks; and new coverage of Stem, Keysight, and Carlyle Group.

As global markets are recovering from the onset of COVID-19 and the global recession, one thing has not changed. U.S. stocks are more expensive than global stocks on numerous valuation metrics. Consider P/E ratios. The trailing P/E ratio on the S&P 500 is 26.5x, above the global average of 19.0x and well above the 14x-15x average P/Es for Chinese and LatAm stocks. A review of price/sales ratios tells a similar story. The U.S. ratio is 3.0x, far higher than the global average of 1.7x, while Emerging Markets appear to be a value at 1.1x. Yields are a slightly different story. The current dividend yield for the S&P 500 is 1.3%, versus the global average of 1.6% and Europe's yields of 2.6%. One reason investors pay a higher price for North American securities is the transparency of the U.S. financial system. What's more, global returns can be volatile across individual countries, given currency, security, and political risks. Indeed, U.S. stocks are outperforming EAFE YTD in -- as well as over the past five years. Even so, we recommend that growth investors have approximately 15%-18% of their equity allocations in international stocks to take advantage of the value, and we have been adding global stocks to our Universe of Coverage.

Stocks rose on Monday morning, led by the Technology and Consumer Discretionary sectors, on continued optimism that the Fed would be cautious and measured in tapering bond purchases. On the housing front, sales contracts for previously owned homes declined for a second month. The National Association of Realtors said that its pending home sales index fell 1.8% in July after a decline of 2.0% in June. The Reuters consensus had called for an increase of 0.4%. The Dow rose 0.1%, the S&P 0.5%, and the Nasdaq 0.9%. Crude oil held steady near $69 per barrel, while gold traded near $1816 per ounce.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the Federal Reserve embarked on an aggressive campaign to raise interest rates, causing Treasury yields to swoop and dive and resulting in a wild ride for supposedly stable U.S. high-income equities. In 2019, the Fed lowered rates in order to restore a normal upward slope in the yield curve. In 2020, global investors, fearing the spread of the coronavirus, pushed rates lower still. Now, in 2021, rates might be headed higher in a few months. The endless speculation over the timing of the Fed's next moves has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as Utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase diversity of holdings while reducing sensitivity to the Fed's head fakes on rate policy. Investing in overseas stocks carries its own set of risks, such as currency exchange and even the potential for geopolitical turmoil. But there are also lots of positives in this asset class for U.S. investors, including a wide selection, robust industry diversification, higher yields and lower valuations. Argus has recently boosted its global coverage, adding the following BUY-rated international dividend stocks.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years as the endless speculation over the direction of rates has created market-timing headaches. Investors have endured wide swings in prices for rate-sensitive equity sectors such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this segment for U.S. investors.

The nation has been transfixed by the deep freeze across most of the country, the power and water woes in Texas, and the prospects for more storms ahead. Quietly and seemingly in the background, the stock market is showing signs of calming.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this segment for U.S. investors. One is a more robust selection of high-quality names. Yields also tend to be higher in overseas markets in general. And finally, valuations can be more attractive.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the U.S. Federal Reserve embarked on an aggressive campaign to raise interest rates, causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. The central bank reversed course in 2019, before moving to the sidelines. In 2020, due to the coronavirus, the Fed is back in action, cutting rates, backstopping numerous financial markets and pledging to do "whatever it takes" and "for as long as necessary." Also due to COVID-19, many U.S. companies have cut back or eliminated their dividends in order to preserve capital during the pandemic. The endless speculation over the timing of the Fed's next moves has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as Utilities, REITs and MLPs -- even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase diversity of holdings while reducing sensitivity to the Fed's head fakes on rate policy. Investing in overseas stocks carries its own set of risks, such as currency exchange and even the potential for geo-political turmoil. But there are also lots of positives in this asset class for U.S. investors, including a wide selection, robust industry diversification, higher yields and lower valuations. Argus has boosted its global coverage, adding the following BUY-rated international dividend stocks.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the U.S. Federal Reserve embarked on an aggressive campaign to raise interest rates, causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. The central bank reversed course in 2019, before moving to the sidelines. In 2020, due to the coronavirus, the Fed is back in action, cutting rates, backstopping numerous financial markets and pledging to do "whatever it takes" and "for as long as necessary." Also due to COVID-19, many U.S. companies have cut back or eliminated their dividends in order to preserve capital during the pandemic. The endless speculation over the timing of the Fed's next moves has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as Utilities, REITs and MLPs -- even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase diversity of holdings while reducing sensitivity to the Fed's head fakes on rate policy. Investing in overseas stocks carries its own set of risks, such as currency exchange and even the potential for geo-political turmoil. But there are also lots of positives in this asset class for U.S. investors, including a wide selection, robust industry diversification, higher yields and lower valuations. Argus has boosted its global coverage, adding the following BUY-rated international dividend stocks.

Stocks were mixed on Monday morning as investors weighed new earnings reports and the details of President Trump's executive orders on coronavirus relief, which circumvent congressional authority and raise a range of legal and constitutional questions. The president's orders call for $400 per week in enhanced unemployment benefits, though these benefits would likely last for only a short period. Making the payments would also be logistically complex and require a $100 per week contribution from financially hard-pressed states. The Dow rose 0.9%, the S&P fell 0.1%, and the Nasdaq fell 0.9%. Crude oil traded near $42 per barrel, while gold rose $16 to $2044 per ounce.

Stocks were mixed on Monday morning as investors weighed new earnings reports and the details of President Trump's executive orders on coronavirus relief, which circumvent congressional authority and raise a range of legal and constitutional questions. The president's orders call for $400 per week in enhanced unemployment benefits, though these benefits would likely last for only a short period. Making the payments would also be logistically complex and require a $100 per week contribution from financially hard-pressed states. The Dow rose 0.9%, the S&P fell 0.1%, and the Nasdaq fell 0.9%. Crude oil traded near $42 per barrel, while gold rose $16 to $2044 per ounce.

This edition features new data on immuno-oncology drugs; moat trends for Chinese coal producers; Australian infrastructure stocks; and notes from ICU Medical, Cognizant, and new coverage Kogan.com.

With earnings season going full steam, gleaning meaningful trends from the weekly insider-transaction data supplied by Vickers Stock Research is arguably a difficult task. After all, corporate executives, directors, and beneficial owners are broadly prohibited from trading at this time and transaction volume is low; so there is not much meat on the bone, as it were. But that's not to say there is nothing of note in the batch of insider transactions that took place over the past week. Here are a few of the relative highlights.

With earnings season going full steam, gleaning meaningful trends from the weekly insider-transaction data supplied by Vickers Stock Research is arguably a difficult task. After all, corporate executives, directors, and beneficial owners are broadly prohibited from trading at this time and transaction volume is low; so there is not much meat on the bone, as it were. But that's not to say there is nothing of note in the batch of insider transactions that took place over the past week. Here are a few of the relative highlights.

The all-or-nothing market breadth has been truly stunning over the past five weeks. There have been 14 days of at least 80% down and six days of 80% up since February 24. This measure looks at NYSE advancing issues versus declining issues.

The all-or-nothing market breadth has been truly stunning over the past five weeks. There have been 14 days of at least 80% down and six days of 80% up since February 24. This measure looks at NYSE advancing issues versus declining issues.

Argus Research covers 55 leading global healthcare companies. Many of them are working on new products, vaccines and medicals supplies and equipment to help healthcare professionals treat Covid-19 patients and prevent the outbreak from spreading even further than its current trajectory projects. Argus Senior Analyst David Toung and Security Analyst Jasper Hellweg cited the following companies in the current battle.

Argus Research covers 55 leading global healthcare companies. Many of them are working on new products, vaccines and medicals supplies and equipment to help healthcare professionals treat Covid-19 patients and prevent the outbreak from spreading even further than its current trajectory projects. Argus Senior Analyst David Toung and Security Analyst Jasper Hellweg cited the following companies in the current battle.

Roche is a Swiss biopharmaceutical and diagnostic company. The firm's best-selling pharmaceutical products include a variety of oncology therapies from acquired partner Genentech, and its diagnostics group was bolstered by the acquisition of Ventana in 2008. Oncology products account for 60% of pharmaceutical sales, and professional diagnostics for more than half of diagnostic-related sales.

Investors have endured a one-two punch in 2020, with February's S&P 500 decline of 8.6% compounding the January dip of 0.2%. But historically, March has been a good month for the markets. The average gain for the S&P 500 in the month of March since 1980 is 1.1%. Only April and the fourth-quarter months of October, November and December have higher monthly average gains. We note market returns in March have exceeded 5% on six occasions since 1980, including a 6.6% gain in 2016 as the market was beginning to recover from the oil plunge of 2014-2015. But there have been some clunkers, including 1980 (-10%), 2001 (-6.4%), 1994 (-4.5%), 1997 (-4.3%) and 1988 (-3.3%). Generally, March is a quiet month on Wall Street, as 4Q earnings reports are finished in February. Without profits to review, investors will be paying very close attention to economic reports, including the nonfarm payrolls report and inflation data, as well as to the Federal Reserve's two-day meeting. This March, of course, investors will be focused on the coronavirus. The virus seems certain to slow segments of the U.S. economy (including consumer spending on services, and exports), but we think other elements of the economy (consumer spending on goods, housing, and government spending) will keep the economy on a growth path.

Investors have endured a one-two punch in 2020, with February's S&P 500 decline of 8.6% compounding the January dip of 0.2%. But historically, March has been a good month for the markets. The average gain for the S&P 500 in the month of March since 1980 is 1.1%. Only April and the fourth-quarter months of October, November and December have higher monthly average gains. We note market returns in March have exceeded 5% on six occasions since 1980, including a 6.6% gain in 2016 as the market was beginning to recover from the oil plunge of 2014-2015. But there have been some clunkers, including 1980 (-10%), 2001 (-6.4%), 1994 (-4.5%), 1997 (-4.3%) and 1988 (-3.3%). Generally, March is a quiet month on Wall Street, as 4Q earnings reports are finished in February. Without profits to review, investors will be paying very close attention to economic reports, including the nonfarm payrolls report and inflation data, as well as to the Federal Reserve's two-day meeting. This March, of course, investors will be focused on the coronavirus. The virus seems certain to slow segments of the U.S. economy (including consumer spending on services, and exports), but we think other elements of the economy (consumer spending on goods, housing, and government spending) will keep the economy on a growth path.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the Federal Reserve embarked on an aggressive campaign to raise interest rates -- causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. In 2019, the Fed lowered rates, in order to restore a normal upward slope in the yield curve. And in 2020, global investors, fearing the spread of the coronavirus, have pushed rates lower still. The endless speculation over the direction of rates has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as utilities, REITs and MLPs -- even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also many positives in this asset class for U.S. investors.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the Federal Reserve embarked on an aggressive campaign to raise interest rates -- causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. In 2019, the Fed lowered rates, in order to restore a normal upward slope in the yield curve. And in 2020, global investors, fearing the spread of the coronavirus, have pushed rates lower still. The endless speculation over the direction of rates has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as utilities, REITs and MLPs -- even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also many positives in this asset class for U.S. investors.