18 May, 2021

$32 billion flowed into bank stocks this year. A record.

The reason my portfolio is a little heavy in financials is in this Wall Street Journal article. The stocks are relatively cheap and they pay a decent dividend. Almost every single stock I own in the financial sector is up by at least 5%. All of them have dividend yields over 2%. I don’t own any of the big banks like Band of America or JP Morgan, however.

Investors, eager to get exposure to an economic recovery, are pouring into bank stocks like never before, putting the stocks on track for what could be their best year on record compared with the S&P 500. Bank of America Corp. and JPMorgan Chase & Co. recently issued gigantic bonds that rank as the two largest single bank deals in history, turbocharging a big year for financial debt issuance.

After years of underperformance since the 2007-08 financial crisis, and a particularly brutal 2020, longtime bank investors are feeling some long-awaited validation. Analysts say the stocks remain cheap, and many shareholders view them as a relatively safe investment that grows along with the economy.

Wall Street Journal
Image by mohamed Hassan from Pixabay
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