Investors have been anxiously waiting for September, and it's finally here. The Federal Reserve has been hinting for months that September is when it will start to cut interest rates, and betting markets are also convinced, with over 80% agreeing on a 25bps cut. The Fed has tacitly gauged public sentiment to guide its decisions, so the cut will likely happen.
Investors have been concerned about market volatility over the past few weeks, and it is natural to be worried. However, you must remember that corrections continue to happen in the stock market, and the market usually recovers from each one. If you're someone who loses sleep due to market volatility, you might want to consider an exchange-traded fund. It is a low-cost, low-risk investment option that provides an opportunity to own elite names without requiring hours of research.
Dividend ETFs with solid payout histories that quote at a discount to their Net Asset Values (NAV) may offer an upside potential kicker in addition to any intrinsic index tracking upside and dividends received.
All it takes is one or a handful of dividend ETFs to build a sound income portfolio around. Investors should start with a strong foundation to produce steady passive income.
The Schwab U.S. Dividend Equity ETF (SCHD) is one of the gold standards as far as dividend-focused ETFs are concerned. With a nearly 4% yield, the American equity basket delivers on the income front while also allowing for a good amount of growth.
