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First Trust Senior V.P. Ryan Issakainen on investing in dividend stocks now that a fiscal cliff deal has been reached.
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Boylan copper at eleven week highs gold a two week highs not just equities here so as investors start to put the fiscal cliff in the rearview mirrors it was part of it.
How can take advantage of the new year with less fear in the market because you know -- still as the -- headline risk well according to Ryan is a kind and first trust senior vice president -- ETF strategist.
That dividend damn not has been unleashed.
And investors should jump in and -- it Brian joining us now in a Fox Business exclusive from Spartanburg, South Carolina all right.
What dividend down technology has traditionally sort of except for the names like Microsoft Intel Hewlett-Packard Cisco.
-- really paid dividends so do you go with those huge names right now or do you start -- -- try and pick some of the names that might.
Issue dividends.
Well I think you can take either approach I think many of the names that have begun paying dividends.
The outlook for them increasing dividends going forward is is very strong especially with some of the uncertainty about dividend tax rates taken out equations.
My best recommendation is an approach that that.
Does both and that gets some of those newly payers and some of the more mature dividend payers by using NE TF like that.
The first trust NASDAQ technology dividend index fund -- the ticker on that is TD IV.
And I think it makes sense that to buy.
A broad basket of technology stocks that pay dividends OK so that's what all of these into -- happen all be in the green today which is very nice but note that both Intel and Hewlett-Packard have been.
The dogs of the Dow certainly they did not perform well -- all last year.
So do you give up some of the -- that you would see in a stock price and is it worth it just to go for a dividend in that case.
I think you've got more than just the dividend I mean many of these companies.
Are certainly more mature but they're still trading at very attractive.
Price earnings multiples.
And I think for many investors that are looking for for dividends for income replacement because interest rates have been so low and the outlook is too that they'll remain low.
Had so many investors have equity income funds that don't have technology exposure so I think.
Adding some of those names why they're using individual stock or -- TF helps balance out and equity income portfolio from the -- To respect -- -- -- familiar with all of the names that we just looked -- right now now let's go to names in a different sector of technology that people might not know.
And they all belong to the clout at the moment cloud computing for those who hear the term but they don't know it's the gigantic servers in the sky where -- Actually storing stuff.
In these servers on different web sites such as Google for example and that -- you don't have to have it just on your PC.
-- -- -- the -- -- productivity in the efficiency gains that come to the economy via the cloud.
-- And so I think adding a portfolio cloud computing names NE TF like ours -- KYY which is the first trust icy cloud computing index fund that we've spoken about before.
I think that makes a lot of sense especially.
Because this is a long term secular growth theme.
That you know for the next decade.
We expect to see more migration to -- to the cloud and so.
You know will those companies pay dividends probably not as much as some of the more mature technology companies but that's because they're investing in research and development.
And they're growing their business they're doing so at a pretty rapid pace.
You know some of the names it now want an -- you're talking about say for example Brightcove -- -- technologies F five Tibco Software.
People who don't know Tibco was known -- that to second advantage company they do a lot of the -- stuff for big exchanges etc.
It's not an entirely.
Sort of virgin sector now it's getting a little bit -- more established.
Do you see enough of a migration to that behavior now that you've really inspires you to say this is a great place it's sort of the good frontier.
-- I think one of the developments that is helping to facilitate the whole cloud space.
Is the increased adoption of broadband access to the Internet because you know five or six years ago -- didn't have enough access via broadband.
To really take advantage of some these cloud technologies.
And at this point.
You do and -- are also getting much more profitability from.
From the corporate standpoint from the consumer standpoint.
With cloud services and so you know I think this critical mass at this point now that there was at 845 years ago so -- You know it it's becoming.
A more mature segment of the market although we are still in the relatively early stages of this -- our progress that's a fair assessment -- good to see -- thank you.
Great thanks listen Brian as a kind of his first trust senior vice president an ETF strategist.
