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Dividends Versus Interest Income -- Barrons.com

Barron's · 01/06/2023 18:30

To the Editor: There are many, many choices ( " Barron's 12 Best Income Investments for the New Year, Cover Story, Dec. 30). Two things to remember: 1) reward equals risk (there's no such thing as a free lunch), and 2) dividends are taxed at a favorable rate over interest income. Having started relatively late in life, I am amazed at the power of compounding of dividends.

Steven Orchard, On Barrons.com

To the Editor: Currently, I think the Vanguard Federal Money Market fund yielding 4.2% is a very good choice.

Arnold Greenbaum, On Barrons.com

Recession in 2023

To the Editor: "The Bulls' Worst Recession Fear: There Won't Be One" (Up & Down Wall Street, Dec. 30) makes one question the consensus view of 2023: first half down and second half recovery.

However, as Randall W. Forsyth points out, there was a huge rise in the M2 money stock. This, together with the structural labor-market shortage, adds tremendous resilience to the economy and job market so the Federal Reserve's interest-rate hikes aren't going to work nearly as fast as we all expect.

The hikes will work in slow motion with a recession finally happening in late 2023.

H.P. Gates, On Barrons.com

Fixing the CDFI Program

To the Editor: The Community Development Financial Institution program is designed to create a market-based, public/private solution to increase the flow of capital to low-income communities ( "This Little-Known U.S. Agency Determines Millions in ESG Investing," Dec. 30). As someone intimately familiar with the CDFI program -- both as a director of a CDFI bank and a large investor in other CDFI banks -- it frustrates me to learn about fringe companies having the CDFI designation. Any reforms that make the CDFI program more sustainable and root out the bad actors are steps in the right direction.

Ben Mackovak, Cleveland

Uncertainty Ahead

To the Editor: One must recall that the forecasts for 2022 were inaccurate and nothing is for sure for 2023 ( "Stock Market Worries for the Start of 2023: The Fed, Payrolls, and Mercury in Retrograde," The Trader, Dec. 30). This is a good time to step back and take note of what the economy, markets, and Federal Reserve will do in the coming months.

My advice for your New Year's resolution is to do your own research, check Barron's, and perform due diligence before making a decision on what stocks you should buy or sell.

Martin Blumberg, Melville, N.Y.

Send letters to: mail@barrons.com. To be considered for publication, correspondence must bear the writer's name, address, and phone number. Letters are subject to editing.

(END) Dow Jones Newswires

January 06, 2023 18:30 ET (23:30 GMT)

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