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Frequent Contributor

Thoughts on Financials and Bank stocks in view of latest Federal Reserve statements?

Curious as to the thoughts of others about adding to bank/ financial stocks here, especially if we have some more pressure to the downside and they sell off further. Federal Reserve stress test results led to Fed putting limits on bank dividends, stock repurchases, etc. Here's a link:

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200625c.htm?utm_source=Master+List&ut...

I hold positions in USB, WFC, HSBC, BRK.B, as well as several REITs (CCI, IRM, WY, O. and WPC). Just reevaluating all of them here. Thanks!

Win
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Participant ○○○

Re: Thoughts on Financials and Bank stocks in view of latest Federal Reserve statements?

From 1994-2005 we used 12-18 individual stocks for our 80% equity allocation. We ALWAYS excluded banks and finance companies, utilities, and real estate.

Now we own some of each because we are passive Boglehead investors.

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Frequent Contributor

Re: Thoughts on Financials and Bank stocks in view of latest Federal Reserve statements?

It seems WFC & COF may have to cut dividends. 

Strong big banks may be fine & even raise dividends in Fall.

Regional banks don't have stress tests.

YBB
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Participant ○

Re: Thoughts on Financials and Bank stocks in view of latest Federal Reserve statements?

The small banks i am interested in wont be affected at all.  Fed policy is aimed exclusively at the big banks.  Some will chop their dividend payments.  Preferreds should escape unscathed.

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Frequent Contributor

Re: Thoughts on Financials and Bank stocks in view of latest Federal Reserve statements?

I'm not investing in financial stocks at this time. My choices are healthcare and defensive stocks, products people will need even with a weak economy.

I'm worried about the market going forward. Unless there is a vaccine on the horizon?

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