Updated
Updated · The Motley Fool · Jun 7
Motley Fool Backs SCHD ETF With 3.3% Yield as S&P 500 CAPE Hits 42
Updated
Updated · The Motley Fool · Jun 7

Motley Fool Backs SCHD ETF With 3.3% Yield as S&P 500 CAPE Hits 42

2 articles · Updated · The Motley Fool · Jun 7

Summary

  • SCHD was highlighted as a defensive ETF for a possible market pullback, offering a 3.3% dividend yield and a portfolio of roughly 100 established companies.
  • The recommendation comes as the S&P 500’s Shiller CAPE ratio reached 42, a level last seen around the 2000 tech collapse, leaving stocks with little room for error.
  • Inflation above the Fed’s target, slower GDP growth over the past two quarters and Trump’s renewed tariff push were cited as potential catalysts for a broader selloff.
  • SCHD’s screen favors balance-sheet strength, long dividend-payment histories and above-average yields, traits that can cushion declines and add income during volatile periods.
  • In 2022, that profile helped the fund fall just 3% while the S&P 500 dropped 18%, underscoring its appeal when investors rotate away from growth-heavy sectors.

Insights

With tariffs and inflation threatening growth, can traditional defensive stocks still protect investors in today's tech-dominated market?
The market's valuation is at a 20-year high. Is this a sign of a looming crash or a new economic reality?
As global tariffs increase costs for U.S. households, what long-term economic shifts will this protectionist trade strategy ultimately trigger?