Q. I am concerned the market is near the historical high and could be in for a correction. Is it safer to get into dividend ETFs?
A. Dividend ETFs are hot right now as investors seek income and safety. But can dividend ETFs really do so? If you look at historical numbers, you may be surprised by the answer.
We will use 3 famous Dividend ETFs to illustrate:
VTV, DVY, and SDY reached their all-time high on May 23, 2007. How did they handle the 2007 – 2009 stock market crash compared to the S&P 500?
From May 23, 2007 – March 06, 2009 the S&P 500 lost 55.11%. Did dividend ETFs fare much better? The answer is NO!
VTV lost 58.50%, DVY lost 63.01%, SDY slightly “outperformed” the S&P with a loss of “only” 54.83% (see chart below).
A. Dividend ETFs are hot right now as investors seek income and safety. But can dividend ETFs really do so? If you look at historical numbers, you may be surprised by the answer.
We will use 3 famous Dividend ETFs to illustrate:
VTV, DVY, and SDY reached their all-time high on May 23, 2007. How did they handle the 2007 – 2009 stock market crash compared to the S&P 500?
From May 23, 2007 – March 06, 2009 the S&P 500 lost 55.11%. Did dividend ETFs fare much better? The answer is NO!
VTV lost 58.50%, DVY lost 63.01%, SDY slightly “outperformed” the S&P with a loss of “only” 54.83% (see chart below).
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