EXCLUSIVE: Find Value In Large Multinationals And Catch The Dividend Yield, Says Tim Seymour

Rate cut expectations have driven up risk appetite in the last two months, and equity investors have been pushing up stocks at both ends of the market capitalization spectrum. Now could be a good time to focus on the large multinationals, says one market expert.

Tim Seymour, founder and CIO at Seymour Asset Management, is also a research strategist for the Amplify International Enhanced Dividend Income ETF (NYSE:IDVO), an exchange traded fund that seeks companies that follow lower risk and higher yield strategies.

Seymour told Benzinga‘s “PreMarket Prep” Friday that IDVO looks for the large multinational companies that are increasing their payout levels — with high dividend yields, cover call strategies and actively managed. The IDVO, he says, has outperformed the equal-weighted S&P 500 since its conception.

Also Read: Inflation Warning For 2024: Red Sea Disruptions Causing Freight Rate Spikes And Higher Costs

Seymour On Economic Downturn

When high growth tech stocks are being driven higher in the current rally, Seymour advises to stand back and consider the fundamentals: the labor market is starting to deteriorate and discretionary spending is going to start falling.

“The sequencing of all the post-COVID economic realities have been much slower to play out,” he says.

Everybody thinks lower rates are going to be better and that’s what is driving the market — but, he says, the Federal Reserve is cutting for a reason.

“Higher rates are bad so lower rates seem better. We all know that lower is ultimately not what we want – get your history books out, and when the Fed starts cutting rates it’s not good for equities,” he says.

Indeed, Benzinga reported last week on historical data that show spikes in unemployment shortly after the Fed starts cutting rates. It’s not a causal relationship; it’s because central banks cut rates into an economic downturn.

“They’re cutting for a reason, but I’m not sure we’re going to move a lot lower on rates,” he predicts.

“There are structural elements of inflation here that aren’t going to get a lot better and could get a little worse. So if the Fed wants to hold the line at 2% then I don’t think we’re going to get there.”

So How Does Seymour Play The Market?

Despite the risk of economic downturn, and a market that…