If you saw the values of some of the tech stocks in your portfolio plummet by 40% or more over the past few months, you are not alone. If you still believe in the long-term prospects of those stocks and nothing has materially changed from a company or industry perspective, there is no need to sell or make any rash decisions — the market will bounce back.
That said, it’s a good idea to offset those short-term losses with investments that perform differently in a given market cycle. So instead of adding more tech stocks to your portfolio, consider these two exchange-traded funds (ETFs) for balance. Both are focused on high dividends and are made up mostly of value stocks, which are a good hedge against declining tech stocks.
1. WisdomTree U.S. High Dividend ETF
The WisdomTree U.S. High Dividend ETF ( DHS 0.06% ) has been among the top-performing ETFs on the market. Year to date, it has returned about 7%, and over the past 12 months, as of March 28, it has posted an 18% return. In a volatile time for technology stocks, it gives you positive returns as well as dividend income to be reinvested or pocketed.
This results in a fund that invests in large, stable, high-quality companies that pay out good dividends. As of Feb. 28, financials represented 14.2% of the portfolio, followed by consumer staples (14.1%) and healthcare (12.7%). The fund has over 300 holdings, with ExxonMobil, Chevron, and Pfizer as the three largest.
It has been a solid long-term performer, with an average annual return of… Continue Reading at THE MOTLEY FOOL
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