The market swooned in the second half of February and early March, with rising bond yields sparking a volatile rotation from growth stocks to value stocks. Rising vaccination rates and the market’s focus on a post-pandemic world also brought some high-flying pandemic stocks back down to earth.
As a result, the past month was much tougher on growth-oriented investors than conservative ones who mainly held defensive dividend stocks. If your portfolio underperformed the S&P 500 during this rotation, you might be holding too many growth stocks and not enough value stocks.
Some growth stocks have recovered since that downturn, but investors might want to consider switching over to some cheaper dividend stocks before the next yield-induced market dip occurs.