"Chasing the highest yield often backfires during volatile periods, as companies that stretch to maintain what are arguably unsustainable payouts tend to cut dividends at the exact time investors need them most. It is better to focus on ETFs that screen for dividend quality rather than just dividend size. The funds that are going to hold up best during market volatility often own companies with low payout ratios, a history of consistent earnings, and long track records of dividend increases."
"Market volatility has a way of testing every investor's patience, as we all have the temptation to react when prices swing wildly and panic sell. This feeling can be overwhelming, but for income-focused investors, volatility doesn't and shouldn't mean it's time to panic. Instead, it can be simply background noise while dividends keep arriving on schedule. The ETFs that are built for this kind of environment"
Market volatility often tempts reactive selling, but income-focused investors can rely on dividends arriving on schedule. Dividend-focused ETFs designed for volatility prioritize companies with durable earnings, manageable payout ratios, and histories of growing or maintaining dividends. Chasing the highest yield can lead to exposure to unsustainable payouts and dividend cuts during downturns. Funds that hold companies with low payout ratios and consistent earnings histories have greater capacity to maintain dividends through bad quarters. Such ETFs may underperform in bull markets but provide steadier income and reduced downside stress for investors.
Read at 24/7 Wall St.
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