Market Correction - A stock market correction is defined as a major index falling 10% from its highs, with the S&P 500 recently falling 10.1% from its all-time high set on February 19 [1] - The Nasdaq Composite is also experiencing a correction, currently 14.2% below its high from December 16 [1] Investment Opportunities - Market corrections present opportunities for investors to acquire stocks and ETFs at lower prices [2] - Dividend stocks are particularly attractive during corrections as they provide guaranteed income regardless of stock price fluctuations [2] Dividend ETFs - The Vanguard High Dividend Yield ETF focuses on large-cap stocks with above-average dividends, currently yielding around 2.6%, which is approximately double the S&P 500 average [4] - This ETF has averaged close to 16.6% annual total returns over the past five years, including dividends [6] - The Vanguard Dividend Appreciation ETF targets large-cap stocks with a history of increasing dividends, yielding around 1.7% [8] - Over the past five years, the dividend payout of this ETF has increased by nearly 85%, outperforming many blue-chip companies [9] Sector Allocation - The Vanguard High Dividend Yield ETF has significant allocations in financials (23.4%), industrials (12.2%), and healthcare (11.1%) among others [7] - The Vanguard Dividend Appreciation ETF has a higher concentration in technology (24.9%) and financials (22.4%) [10] Expense Ratios - Both ETFs feature low expense ratios, with the Vanguard High Dividend Yield ETF at 0.06% and the Vanguard Dividend Appreciation ETF at 0.05%, allowing investors to retain more of their gains [11][12]
Cool, Calm, and Collected: 2 Dividend ETFs to Buy During the S&P 500 Sell-Off