Beyond ForexJan 27, 20265 Min

Is Now the Time to Rebalance Toward Global Dividends and Value Stocks?

The world equity markets are at a crossroads. Following the years of dominance of the growth-oriented U.S. technology stocks, there are indications of a wider market change. There is now a greater need to rebalance the portfolio towards more conservative, income-generating investment opportunities.

Some of the best opportunities that are accessible to investors include global equities with a focus on high dividend yield or a value investing strategy. In this blog, we will understand why now may be the right time for you to invest in the best global dividend stocks in 2025.

Understanding the Global Market and Evolving Trends

The past decade has seen growth stocks dominate, driven by technology and innovation sectors. This dominance is now slowing. On top of it, there are signs of economic uncertainty and market volatility. This has revived investors' interest in the stability that a value investing strategy and global dividends provide. The direct implications of these macroeconomic changes on equity markets are:

• Growth stocks that were successful in a low-rate environment are currently under pressure to be valued as discount rates increase.
• Value stocks, usually financials, energy, and industrials, were likely to be resilient to inflation and have a steady cash flow.
• Investors are returning to dividend-paying companies as a way of getting consistent income due to fluctuating returns on prices.

The prevailing market environment indicates a slow shift in performance of growth-led to income and value-based opportunities. With the widening of valuation gaps and economic normalisation, this can be an opportune time to review portfolio balance between growth momentum and fundamental value for investors.

Why Consider Global Dividends Now?

In 2025, dividend-paying companies around the world have shown strong performance and stability. Global companies paid a record $519 billion in dividends in Q3 2025. Here are all the reasons to consider global dividends:

• Consistency and Predictability: The companies that provide high dividend yield payments are usually established businesses with consistent cash flow and stable business models. During times of uncertainty, they can be counted on for a steady income.
• Protection Against Inflation: With inflation reducing purchasing power, a growing number of individuals look to their dividend payments as protection against inflation. Thereby, increasing the overall return on their investments.
• Access to Global Equity Markets: Access to global equity markets helps diversify the portfolio to reduce the risk of being tied to a single country or region. It also offers access to attractive dividend yields, which may exceed those found domestically.
• Total Return: Dividends from high dividend yield stocks represent a significant portion of an investor's total return over time. This is especially true if the dividends are reinvested and allowed to compound over time.
• Reduce Risk: Historically, dividend-paying stock in a value investing strategy has less price volatility than non-dividend (growth) stocks. Thus, making the shares of such companies a lower-risk option for investors.

Why Value Investing Is Making a Comeback

Value investing is making a comeback after many years of domination by growth stocks. Here is why:

• Valuation gap: The price-to-earnings (P/E) ratio difference between growth and value stocks is at a 20-year high. This implies that growth stocks are now far more costly than value stocks.
• Historical trend: Research indicates that value investing is more likely to be more effective in the long term. The growing trends imply that times of poor performance of value stocks are usually followed by robust recoveries.
• Macro backdrop: As interest rates remain high and the world economy decelerates, investors are increasingly preferring companies that can provide consistent income and strong cash flows. Value stocks usually perform well during such periods.
• Sector strength: Almost half of the dividend growth in the world was in the financial sector, with energy and industrial sectors following. They are traditional value industries that pay off to investors in terms of both revenue and long-term stability.

Strategic Timing for Portfolio Rebalancing

Knowing when to rebalance a portfolio depends on valuation levels, current cycle phases of markets, and present and future economic trends. The most common indicators of this would be:

• Interest Rate Shifts: Rising interest rates generally create downward pressure on growth stocks. However, it increases the appeal for investors in value investing strategy and high dividend yield sectors.
• Warning Signals of Economic Slowdown: With recession risks increasing, investors can consider investing in companies that provide consistent cash flow and dividend payments in global equities.
• Value Stocks vs Growth Stocks (valuation gaps): If growth stocks have outperformed other stock types, it is advisable to invest some of those gains into undervalued value stocks.

When determining whether or not to rebalance a portfolio, investors should not make decisions based solely on short-term movements of their investments. The decision should rather be based on well-researched historical data from a company's financial statements, dividend history, and valuation data.

How Market Changes Affect Your Stocks

Growth Stocks vs Value Stocks: The Case for Value

Growth stocks are valued for their high potential for future earnings and have a premium price. However, they also come with high volatility and valuations that are often at a premium. Value stocks, on the other hand, offer investors:

• Lower P/E (price to earnings) ratios.
• High dividend yield.
• Balance sheet strength.
• Offers some form of protection when rebalancing a portfolio during market corrections.

Here are the key differences between growth stocks vs value stocks you must know before choosing between the two:

How to Identify the Best Global Dividend Stocks for 2025

Choosing the best global dividend stocks 2025 involves an organised process that is focused on:

• Sustainable Dividends: The company's payout ratio should be in line with its earnings and free cash flow.
• Growth of Dividends: The ability to grow dividends over time.
• Diversification through Sectors/Geographic Locations: The ability to diversify and minimise risks across global equities.
• Strong Financial Condition: Strong balance sheet and minimal leverage.

Utilities, healthcare, and telecommunications are all sectors that provide higher dividend yields than most other sectors. However, emerging markets also have the potential for higher dividend yields, though higher risk.

Practical Steps to Rebalance Toward Dividends and Value

Here is how you can rebalance your portfolio toward dividends and value:

• Collect Data: Gather information about your portfolio and organise it into categories such as:
  • Portfolio Holdings (list all stocks you currently own).
  • Dividend Yield (list each stock’s dividend yield).
  • Sector/Industry Classification (list the sectors or industries your stocks are classified in).
  • Valuation Multiple (list each stock's P/E ratio, P/BV, etc.).
• Identify Your Overweight Growth: Analyse your total exposure to the growth stocks sector, as well as which specific stocks have above-average valuations.
• Define Your Target Allocations: Know how you want your portfolio to be allocated to high dividend yield stocks and how much to value stocks. Depending on your risk tolerance, this will typically be around 30% to 40%.
• Identify Potential Candidates Globally: Use fundamental analysis, historical dividend payments, and valuation ratios to select potential candidates for high dividend yield stocks and value stocks globally.
• Portfolio Rebalance: Gradually reallocate funds from your growth stocks to your selected high dividend-yielding or value stocks over time.
• Monitor & Rebalance as Needed: Rebalancing is an ongoing process and should be reviewed regularly. Portfolio rebalance should be checked, due to market fluctuations, quarterly or at least annually.

Conclusion

Identifying the right time to decide when to rebalance the portfolio toward global equities is important for maintaining portfolio resilience. As we move into 2026 with looming uncertainty around the world economy, high dividend yield and fundamental value-based investments will likely be the most stable way to generate income. Creating a diversified portfolio will capture both growth and value investment opportunities.

Sources

• How to Rebalance Your Portfolio Before 2025 | Morningstar
• The 10 Best Dividend Stocks | Morningstar
• Why and How to Rebalance Your Portfolio - Share IndiaShare India
• Dividend Stocks - List of Popular Stocks to Buy In India 2025
  

Disclaimer: The information provided in this article is for educational and informational purposes only and should not be considered financial, investment, or trading advice.