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Proprietary Data Insights Top Dividend Aristocrat Stock Searches This Month
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Too Bad You Didn’t Invest In Vinyl Records Earlier this month, Harry Styles released his latest album. Cool Dad I am, I ordered a vinyl of Harry’s House for my 18-year old daughter. Come to find out, she already secured her own copy. Of course. So we each dropped $38 (plus shipping) on the record. $38! Lately, we’re obsessed with how much things cost. Makes sense in an economic environment where some Americans are buying houses amid record prices and 5%-plus mortgage rates as others blow through their savings then rack up debt to, presumably in some cases, just get by. Like me, maybe you fall somewhere in the middle. Can’t afford a house today. But you’re still comfortable. You don’t sweat a seemingly unnecessary $38 vinyl record discretionary purchase. Statista data reveals 41.7 million units of vinyl sold in 2021, up 52% from 2020. These numbers on vinyl are impressive:
Rough math tells us the average cost of a vinyl record in 2021 was about $24. Of course, bigger names such as Styles and Swift command premiums. It costs about $1,225 to press 100 vinyl records. So $12.25 each. Add bells and whistles such as color to the vinyl or record sleeve and the cost increases. There’s marketing and other costs making $38 at retail (and especially $24) feel slightly less outrageous than when we started this conversation. Maybe we’re stretching for good economic news, but we’ll chalk this up as such. The vinyl industry thrives on the backs of consumers who choose to pay big bucks for music despite all-you-can-eat monthly streaming options priced closer to $10-$15 a month. |
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Investing |
What Is Stagflation Anyway? |
Key Takeaways:
There’s lots of talk about stagflation. Maybe you lived through it last time it happened, most famously in the 1970s. I was being born in the decade. I don’t remember it. My parents never talked much about it. But I assume they felt some impacts. Definition Of Stagflation Generally speaking, stagflation occurs when you have:
More precise definitions vary depending on who you talk to. However, one standard illustration of stagflation looks like this:
In terms of economic growth, stagnation or contraction needs to occur. The latest data – along with a growing number of expert predictions – indicates we could be headed for a recession. Source: BEA While we experienced 5% inflation and unemployment in 1990, the most persistent and meaningful period of stagflation occurred between 1974 and 1982 when both numbers stayed above those benchmarks. For example, the inflation rate hit 13.5% in 1980 alongside 7.5% unemployment. In response the Fed raised interest rates to as high as 20% leading to a major recession in 1981-82 and close to 11% unemployment. We’re not there yet. What To Do If We Get There, Or Close? Two prevailing thoughts dominate the discussion around how to respond to stagflation. Turn to cash. At the moment, many investment pros are turning to cash, particularly treasury bills, which have seen the most money coming in since 2020. Since April, investors have directed $3.3 billion to the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) and $2.2 billion to the iShares Short Treasury Bond ETF (SHV). The focus here – capital preservation. Sure, inflation wrecks the purchasing power of your cash. However, cash beats owning companies about to get hit if and when they report crappy earnings in a shrinking economy. Invest in “cash cows.” That’s the advice from some Wall Street analysts. They suggest stocks that pay attractive and steady dividends because these names tend to outperform in an inflationary environment that’s accompanied by slowing economic growth. For cash cows, look no further than dividend aristocrats. The Juice discusses them in depth here and here. In a nutshell, they’re companies that have increased their dividend every year for at least 25 years. In short, they tend to have the cash flow and cash on hand to weather storms and support these consistent payouts to shareholders. The Bottom Line: At the top of this email, we list the 10 (out of 66) dividend aristocrats drawing the most interest in our Trackstar database. This list could be a good place to start if you’re in the midst of positioning your portfolio against more of the same or, worse, stagflation. Bonus: We wrote about #9, Procter & Gamble (PG), just the other day in The Juice. |
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