The article discusses how dividend ETFs performed better than the S&P 500 during the 2022 bear market and suggests they could be a protective investment in the current economic climate, which shows signs of potential slowdown. It highlights three specific dividend ETFs—Schwab U.S. Dividend Equity ETF, Vanguard High Dividend Yield ETF, and iShares Core High Dividend ETF—that outperformed the index during the previous downturn and may do so again.
In light of potential economic slowdowns and rising interest rates, consider allocating a portion of your portfolio to dividend ETFs like Schwab U.S. Dividend Equity ETF (SCHD), Vanguard High Dividend Yield ETF (VYM), or iShares Core High Dividend ETF (HDV). These ETFs have historically outperformed the S&P 500 during downturns, providing downside protection and quicker recovery due to their focus on high-yielding and cyclical stocks.