The Dividend Cafe Thursday - July 31, 2025
Jul 31, 2025
The market shows a slight downturn despite strong tech earnings, prompting a dive into key economic indicators like jobless claims and inflation data. The host highlights how inflation assumptions shape financial planning. The energy sector emerges as a focal point, with improved balance sheets suggesting potential for dividend growth. Listeners gain insights into managing long-term investment assumptions and the risks that accompany them, emphasizing a contrarian approach to energy investments as volatility diminishes.
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Market and Economic Data Recap
- July 31 market closed modestly down despite strong tech earnings early in the day.
- Economic data showed positive signs with jobless claims stabilizing and stronger-than-expected manufacturing PMI.
Set Realistic Inflation Assumptions
- Use a normalized inflation assumption around 2.5% for financial planning models.
- Adjust rate of return and inflation assumptions carefully to reflect realistic long-term expectations.
Energy Sector Stability Improves
- Energy sector stock volatility has declined due to stronger balance sheets and reduced leverage.
- Despite persistent oil price swings, energy sector stocks now have lower relative volatility and potential for dividend growth.