High-yield dividend stocks are often discussed as being “safer” or “steadier” than tech stocks — but that relative sense of safety comes at a price. Dividend stocks often don’t grow as fast as the best tech stocks. That’s because companies that pay strong dividends tend to be mature, well-established companies. They have strong business models and solid balance sheets, but they’re unlikely to see their share prices skyrocket as some of the best artificial intelligence (AI) stocks have in recent years.
However, if you’re feeling nervous about AI stocks and want to diversify some of your investments into a different part of the market, buying high-yield dividend exchange-traded funds (ETFs) could be a good strategy. The Schwab U.S. Dividend Equity ETF (SCHD +1.86%) is one of the best dividend index funds.
Let’s look at why SCHD might be a good buy in the event of an AI stock sell-off,…
