Dividend ETFs for an Uncertain Market
March 16th 2012 at 6:00am by Tom Lydon
Economic data is looking more positive and stock valuations seem relatively low, but we shouldn’t be lulled into a false sense of security. Regardless of how the markets play out, dividend exchange traded funds will still provide investors with additional cash on the side.
While the Bureau of Labor revealed better employment numbers, the U.S. jobs market could be softening, writes Gary Gordon for TheS treet.
If jobs numbers improve, it may put pressure on Treasury yields and the Fed’s near-zero interest rate commitment.
Still, if job creation and GDP expand at a leisurely pace, the Fed, along with other global central bankers, can continue its ongoing interventions and push investors into the equities market.
Nevertheless, market bears will point to the escalating Middle East tensions, higher commodities prices, limited Fed policies, Eurozone debt problems and slowing Chinese growth as causes for concern. [No Free Lunch: The Risks of Dividend ETFs]
Gordon suggests that it is a good time to take opportunistic buys in safer dividend stocks like the Vanguard High Dividend Yield Fund (NYSEArca: VYM) or the EGShares Low Volatility Emerging Market Dividend Fund (NYSEArca: HILO). [Emerging Market Dividend ETFs Grab Market Share]
At ETF Trends, we like to follow a strict regiment based on long-term moving averages. We look to the 200-day moving average to help decide when we are in or when we are out of a particular market.
Vanguard High Dividend Yield Fun
For more information on dividend payers, visit our dividend ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.