2 High-Dividend Yield ETFs to Invest In for Earning Passive Income
Investing for Passive Income: Many investors prioritize finding investments that generate passive income, especially as they approach retirement, allowing for a steady income stream without selling holdings.
Schwab U.S. Dividend Equity ETF: The Schwab U.S. Dividend Equity ETF (SCHD) offers a 3.9% yield and a low expense ratio, tracking the Dow Jones U.S. Dividend 100 Index, which focuses on companies with strong financial metrics to avoid value traps.
Alerian MLP ETF: The Alerian MLP ETF (AMLP) provides a higher yield of 8.8% and allows investors to bypass K-1 forms associated with individual MLPs, while benefiting from the strong cash flow visibility of midstream partnerships.
Market Opportunities: The current market presents a favorable entry point for high-yield investments, as many stocks in the Alerian MLP ETF have raised their distributions recently, indicating growth potential despite trading at a discount compared to pre-COVID levels.
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Analyst Views on SCHD
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- Shift in Investment Focus: Wall Street is increasingly concerned that artificial intelligence may threaten white-collar jobs, leading to a renewed interest in hard-hat and "real economy" stocks.
- Market Trends: The fear of AI's impact on employment is influencing investment strategies, making traditional industries more appealing to investors.
Market Rally: The market rally is expanding beyond just tech stocks, indicating a broader recovery.
Dividend-Paying Stocks: Companies like Exxon Mobil, Walmart, Ford, and Coca-Cola are outperforming traditional tech favorites.
Market Reaction: President Trump's threats regarding Greenland are causing fluctuations in the stock market.
Investor Strategies: Despite the market uncertainty, investors have various effective strategies to mitigate risks.
Market Performance: The S&P 500 has experienced three consecutive years of double-digit returns, indicating a strong market performance during this period.
Investment Strategy: Dividend investors are encouraged to explore strategies that can provide more downside protection for their portfolios in light of potential market fluctuations.
Types of Market Crashes: Stock market bubbles can lead to two distinct types of crashes when they burst: sector-specific crashes and systemic crashes.
Sector-Specific Crashes: An example of a sector-specific crash is the dot-com collapse that occurred between 2000 and 2002, which primarily affected technology stocks.
Systemic Crashes: In contrast, systemic crashes impact the entire market, as seen during the financial crisis of 2008-09, where widespread declines occurred across various sectors.
Uniqueness of Bubbles: Each stock market bubble is unique, much like snowflakes, indicating that the circumstances and outcomes of each bubble's burst can vary significantly.
- Trump's Economic Claims: President Donald Trump frequently highlights record stock prices as evidence of his economic success.
- Critique of Dividends: Recently, he criticized dividends, which are a significant contributor to stock market returns.










