"This current market backdrop is one that's kind of hard to parse out, in terms of which direction stocks are headed from here. On the one hand, the job market does appear to remain strong, and there are indications that inflation is coming down. On the other, stagflation looks like a more likely outcome as more and more tariffs are handed down, and the independence of the Federal Reserve and other key government agencies does appear to be waning."
"Ultimately, we'll have to see how everything shapes up. But for long-term investors looking to position their nest eggs appropriately to combat what could be a period of higher inflation, not owning stocks (which have shown an incredible ability to rise during such periods) could be a mistake. Indeed, investors who have sat on the sidelines since, say the pandemic, have missed out on incredible gains and may be kicking themselves right now."
"One of my top picks I've touted in the past, the Vanguard High Dividend Yield ETF (VYM) is an excellent option for investors looking for exposure to U.S. dividend-paying stocks, but don't like the sub-1% yield many index ETFs provide in this environment. Indeed, I'm one such investor who doesn't find such a yield compelling, even if capital appreciation for stocks has remained solid over the better part of the past two decades."
Market conditions are mixed: the job market remains strong and inflation appears to be easing, but rising tariffs and weakening independence of the Federal Reserve raise stagflation risks. Long-term investors who avoid stocks risk missing gains because equities have historically performed well during inflationary periods. Current conditions make concentrating in individual stocks risky for many investors. Low-cost, diversified ETFs offer a preferable way to gain equity exposure for retirement portfolios. The Vanguard High Dividend Yield ETF (VYM) provides exposure to U.S. dividend-paying stocks and offers a meaningful yield above 2.5%, compared with sub-1% yields of many index ETFs.
Read at 24/7 Wall St.
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