Legendary investor Bill Gross is urging investors to buy reliable dividend paying stocks as markets around the world continue to crash on fears of a global trade war and heightened recession risks.
“This is an epic economic and market event similar to 1971 and the end of the gold standard except with immediate negative consequences,” wrote Gross on social media. He added that “investors should not try to catch a falling knife” and buy the current drop in stocks, stressing that today’s bargains will be around tomorrow and likely for many days ahead.
Instead, Gross is recommending that investors buy three reliable dividend stocks to help insulate their portfolios from the current market crash: telecommunications giants Verizon (VZ) and AT&T (T), and tobacco company Altria (MO). Verizon and Altria offer dividend yields of more than 6%, while AT&T’s distribution to shareholders yields 4%.
The Bond King
Known on Wall Street as the “bond king,” Gross made his name by aggressively trading bonds at a time when other investors and large institutions such as insurers and pension funds were shying away from the investment vehicle. Now age 80, Gross has seen his share of market ups and downs, and is warning investors to exercise caution in the current downturn.
Even with the dividend payers he recommends, Gross is telling investors to be careful as VZ, T and MO stocks have each seen heavy buying recently and are approaching “overbought’ territory.” Gross expects a continued bumpy ride for the stock market over the near-term as tariffs spark a trade war and increase the chances of an economic recession in the U.S.
Is VZ Stock a Buy?
The stock of Verizon has a Moderate Buy rating among 18 Wall Street analysts. That rating is based on seven Buy and 11 Hold recommendations assigned in the past three months. The average VZ price target of $46.69 implies 4.49% upside from current levels.
