Wants versus needs

Question: Why are dividends generally less sensitive to market challenges?

Michael Tucker: So in general, those companies that pay high dividends tend to be companies that are focused on those more non-discretionary type purchases. So companies in sectors like consumer staples, large cap pharma, utilities, telecommunications, and even energy and REITs for an example, as well. So those type of purchases hold up better during periods of macroeconomic weakness or macroeconomic uncertainty, or even periods of high inflation, because those are purchases that customers, consumers need. So even though they may purchase less outside of that basket, they tend to have to purchase those items over time.