Investors seeking to boost returns in their 60/40 portfolio should look to what AllianceBernstein calls "the magnificent others."
"If you're finding companies that are giving you dividend growth rates of anywhere say from 10% to 12%, well north of inflation, that has a nice compounding effect," he said.
What makes these dividend-paying stocks appealing is that free cash flow is expected to grow roughly 7% over the next five to six years, he said.
Instead, investors should focus on companies that have free cash flow, a strong balance sheet and are competitively positioned, he said.
Within dividend-paying names, Czaicki sees three specific areas of opportunity: energy transition and security, supply chain security, and national defense and cybersecurity.
Persons:
Walt Czaicki, Czaicki, They're
Organizations:
Federal Reserve, Tech, Income