After peaking at the end of last month, the S&P 500 and the Nasdaq Composite Index logged in the fourth straight day of decline last week with the latter registering the worst start to September since 2008. The sluggish trading was driven by a steep sell-off in the tech sector and Trump’s new tariff threat.
Donald Trump threatened to impose tariffs on additional $267 billion, in addition to the proposed 25% duty to be levied on $200 billion of Chinese goods. The move will escalate trade tensions between the United States and China. Additionally, Bloomberg News reports that the United States and Canada will likely end the week with a no trade deal.
Further, the prospect of faster-than-expected rates hike also took a toll on the stocks. If these weren’t enough, the seasonal phenomenon resulted in the decline. September is historically a weak month for the stock market and even worse in the mid-term election years.
The return of volatility in the stock market has rekindled investors’ love for products that provide stability and safety in a rocky market. Nothing seems a better strategy than picking dividend-focused products in this kind of an environment.
Dividend-focused products offer safety in the form of payouts while at the same time providing stability as mature companies are less volatile to large swings in stock prices. Dividend paying securities are the major source of consistent income for investors to create wealth when returns from the equity market are at risk. This is because the companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.
That being said, we highlight five dividend ETFs for investors seeking yields and returns in a rocky market. These funds yield higher than the S&P 500, making them excellent choices in the current market turmoil.
Global X SuperDividend U.S. ETF (DIV – Free Report)
Leave A Comment