Oversold and undervalued

Question: What dividend-paying sectors of the market appear undervalued?

Deborah Bickerstaff: We're all questioning what the balance of 2023 looks like, and I would love to call for a pivot away from Big Tech. Currently, I can't do that, but what I can do is tell you that dividend-paying companies are on sale. Remember, there is a natural rotation to the market, risk-on versus risk-off, growth versus value, high-quality versus low-quality. What we've just come through Big Tech in favor, value dividend investing out of favor. But again, a natural rotation to the market, a natural balance to the market cycle that I have great optimism and frankly, I'm pounding the table with the notion that dividend investing is here to stay not just for the balance of this year, but frankly for the next decade. But when I look near term, what I think I'm seeing in the market is that there are pockets that are very expensive and then there are other areas of the market that have been painfully oversold. That presents opportunity. Now as a dividend collector, I can't go chasing the next dot-com, the next AI security. I have to stay in my lane, and that does give us visibility to when we are in or out of favor. Federated Hermes frankly has been managing dividend-based portfolios for more than 20 years at this point in time. So when I take a look at the market today sectors that I like, Energy, Energy always outperforms in a rising interest rate environment, and that's where we're at today. We also like Utilities, Consumer Staples, those segments of the market painfully oversold and are really gaining a lot of attention out there. Remember, we are all in business to buy low and sell high. What I can tell you is the dividend investing space is on sale and is worth a second look at this point in time.