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FDVV: A Dividend ETF To Consider, Despite The Risks

Published Wed, 30 Oct 2019 16:43:27 -0400 on Seeking Alpha

In the current uncertain economic times, it makes sense for investors to consider buying high-quality dividend-paying stocks which can not only withstand a downturn but also generate enough profits and cash flows to continue rewarding investors with dividends. The Fidelity High Dividend ETF (FDVV) gives investors exposure to a number of such stocks and it comes with an above-average yield of more than 4%. Fidelity High Dividend ETF also maintains a diversified portfolio which isn't tilted towards any single company. The fund's drawback, however, is that its exposure to the financial sector can weigh on its performance. But those who believe recession related fears are overblown should consider buying Fidelity High Dividend ETF.

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The third quarter turned out to be a difficult period for many investors as market seesawed, with the S&P-500 shedding more than 180 points in the first half of the period, only to recover by mid-September, but dropped again towards the end of the quarter. The Wall Street largely focused on the US-China trade war, which has been going for well over a year now. Meanwhile, the US Federal Reserve reduced interest rates in September for the second time since 2008 as fears related to trade war and slowing global economic growth mounted. The US central bank cut the target range for its key interest rate by 25 basis points to 1.75%-2%. These factors produced an inverted yield curve earlier this year, which isn't a good... Read more