The Schwab U.S. Dividend Equity ETF (SCHD) is up 25% year to date, versus a 14% total return for Vanguard's S&P 500 ETF, but sits 4%-5% below its all-time high. The Motley Fool writer says the dip reflects short-term volatility, not a changed investment case.
SCHD holds roughly 100 stocks selected for balance-sheet health, dividend-growth history and above-average yield, including Coca-Cola, Procter & Gamble and Chevron. The article says earnings growth, GDP growth and labor-market resilience have not materially changed that case. Its disclosure says David Dierking has positions in SCHD.
Inflation and higher interest rates are identified as near-term concerns. The article cites Fed Chairman Kevin Warsh's comments that economic activity continued to expand, consumer spending remained positive and productivity growth was strong. The writer argues that if the Fed can raise rates and address inflation without pushing the economy toward recession, stocks could still rise. The article also says 10% corrections average roughly once every one to two years, and the S&P 500 has fallen at least 5% in all but three calendar years since 1980.
