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While many investors were trying to enjoy the final weeks of summer, the stock market embarked on a wild roller-coaster ride. In August alone, the Dow Jones Industrial Average ($INDU) experienced daily swings of at least 500 points on seven occasions.

Why is market volatility so high? We believe that it's largely attributable to a case of "bad macro, good micro."

While the microeconomic story of corporate earnings reports was positive, news affecting the overall global marketplace, or the macroeconomic environment, has been decidedly negative.

Many issues have surfaced, but we believe that two factors in particular are leading to a crisis of confidence among investors. First, growth expectations for the gross domestic product have been revised downward to a rate so low that meaningful job creation -- and a resulting drop in the high unemployment rate -- appears unlikely this year.

Some market participants look at the latest numbers and see a temporary midcycle slowdown; others see the same numbers and predict a double-dip recession. Either scenario is possible, and the day-to-day movement of the markets seems to result from speculators in one camp or the other.

Second, the risk of a widespread default of European sovereign debt, which has been roiling markets worldwide, is reaching a critical point. What started in Greece has spread to the much larger economies of Italy, Spain and even France. The lack of coordination among policymakers and their inability to agree on a course to avert default has caused the situation to teeter back and forth between periods of relative calm and outright panic.

What's most troubling is the lack of urgency among central bankers and political leaders to forge a real plan to address the problem. Viewpoints are far apart, and time is running out. None of these countries can afford to "kick the can down the road" much longer -- compared with the United States, their debt issues are much more short-term.

So, with the flow of news and the global economic outlook so uncertain, more market volatility is inevitable. However, investors should not lose sight of the good micro story as it relates to U.S. companies.

Throughout the reporting period for second-quarter earnings, company after company beat expectations and signaled a healthy sales outlook for key products. Balance sheets are the strongest they've been in years, with a great deal of cash in the coffers. The ability of companies to use technology to increase productivity and efficiency has temporarily hurt job growth, since companies can eliminate the need for more workers while still growing.

These advancements, however, have certainly benefited the bottom-line earnings of corporations. With corporate profits holding up in a troubling macro environment, stocks are certainly not expensive compared with historical valuations.

So, with a list of uncertainties on the macro level but with strong fundamentals at the micro level, how should an investor proceed? We think the global outlook calls for continuing with a cautious, defensive stance in September. In this environment, a stock's dividend yield may prove to be an important cushion against market volatility.

Plenty of companies are performing well this year and are seeing their share prices hold up and even advance, with the added bonus of rewarding shareholders by paying dividends. With bonds yielding next to nothing, an income stream from a dividend-paying stock is even more attractive.

In the consumer area, shares in McDonald's (MCD) yield 2.9%. The fast-food purveyor is one of the most valuable brands in the world, and more than half of its operating income is from overseas operations. McDonald's has been expanding aggressively in emerging markets, with plans to double the number of locations in China alone.

The large-cap telecommunications companies can provide an anchor of stability for a stock portfolio. BCE (BCE), the parent of Bell Canada, has been producing for shareholders by enhancing its productivity, reducing its cost structure and expanding and bundling its wired, wireless, Internet and data services. The company enjoys a dominant market share in its home markets. The stock has a 5.4% dividend yield.

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In the energy sector, there are many companies structured as multiple limited partnerships or royalty trusts that pay healthy cash distributions. For example, shares of Pioneer Southwest Energy Partners (PSE), which is affiliated with parent Pioneer Natural Resources (PXD), yield 7.6%. The Irving, Texas, company boasts a stable and predictable history with its quarterly dividend. One warning -- share prices will be volatile, primarily in response to oil and gas prices. Therefore, this pick may not be an appropriate holding in more-conservative portfolios.

David Kudla is chief executive and chief investment strategist of Mainstay Capital Management.