This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

2 Dividend ETFs for a Downgrade

NEW YORK ( TheStreet) -- In light of Standard & Poor's' decision to downgrade the credit rating for U.S. debt for the first time in history, it is understandable that investors are on edge.

From an investing standpoint, conservative and fearful investors may find the rocky action over the past few days to be a prime reason to steer clear of the markets entirely. On the opposite end of the spectrum, aggressive investors may see the recent dismal action to be all the reason needed to dive into risky assets in hopes of making up losses by profiting from battered equities.

While both strategies may be alluring, I would encourage investors to take neither route. As I explained at the start of the week, given the market's performance and global headwinds, patience and level-headedness are the key traits that will be needed to navigate these choppy waters. Rather than playing into resounding fear or rampant greed, a conservative approach will likely be the best course of action.

On Tuesday, I highlighted a handful of ETFs that appear well suited to inject a welcomed dose of stability into an investor's well-diversified portfolio. While gold, safe-haven currencies like the Swiss franc, and mega cap stocks are all attractive in their own right, they are not the only asset classes that should be on the radar.

ETFs designed to offer yield by way of dividend paying equities represent another strong tool in an investor's arsenal. ETF like the iShares Dow Jones Select Dividend Index Fund (DVY) or the SPDR S&P Dividend ETF (SDY) cast wide nets over the U.S. equity markets, targeting companies dedicated to providing investors with attractive yields that will come in handy in turbulent market conditions.

DVY's 100-component index is headlined by companies including Lorillard (LO - Get Report), VF Corp (VFC - Get Report) and Chevron (CVX - Get Report). SDY, meanwhile, is backed by slightly over 60 firms, setting aside the largest chunks of its assets to Pitney Bowes (PBI - Get Report), Centurylink (CTL) and Consolidated Edison (ED).

Dividend-paying stocks have become an increasingly attractive destination among the income investing crowd. As TheStreet staff writer Robert Holmes pointed out at the start of the week, the yields offered by 22 of the 30 companies comprising the Dow Jones Industrial Average currently trump that of 10-year U.S. Treasuries.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DVY $79.67 -0.39%
SDY $79.39 -0.35%
CVX $107.06 -1.40%
LO $68.51 -0.41%
PBI $23.09 -0.99%


DOW 18,214.42 -10.15 -0.06%
S&P 500 2,110.74 -3.12 -0.15%
NASDAQ 4,987.89 +20.7530 0.42%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs