Despite losses, bank stocks a solid bet

espite the recent taint of subprime loans gone bad, bank stocks are still considered a good solid investment vehicle, according to local financial experts. Bank stocks traditionally have the high yields investors crave but with the security of a government bond fund. “Over the long term they have shown to be very good investments in terms of dividend growth and capital appreciation,” said Dan Chappie with Peninsula Asset Management in Bradenton.

Yet bank stocks are part of the financial sector of the stock market which has been the worst performing sector this year, with a loss of 8 percent since the beginning of the year, Chappie pointed out. Much of the recent downturn has been related to the subprime mortgage loans. In fact, Citigroup warned Monday that turmoil in the mortgage and buyout sectors would put a huge ding in its third-quarter results.
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