But with tension with economic uncertainties, that could change. While it would be easy to just sell everything out of fear you’ll lose money, that’s actually a terrible idea.
By jumping out, you’re preventing yourself from making your money back from a resilient market. We have to remember that markets have been through worse pullbacks and bounced.
Instead, in these uncertain times, protect your portfolio with yielding ETFs, such as:
Vanguard Dividend Appreciation ETF
With an expense ratio of 0.05% and a monthly yield of 1.73%, the Vanguard Dividend Appreciation ETF (VIG) is also an attractive opportunity.
It tracks the performance of the S&P U.S. Dividend Growers Index and invests in large-cap stock with a record of dividend growth.
Some of the VIG ETF’s 338 holdings include Apple, Microsoft, Broadcom, JPMorgan, Eli Lilly, Visa, Exxon Mobil, UnitedHealth Group, Mastercard and Costco Wholesale to name a few.
Fidelity High Dividend ETF
We can also look at the Fidelity High Dividend ETF (FDVV).
With an expense ratio of 0.16% and a yield of 3.26%, the FDVV ETF tracks the Fidelity High Dividend Index, which is designed to reflect the performance of stocks of large- and mid-capitalization dividend-paying companies that are expected to continue to grow dividends.
There are several factors that affect the overall level of index option prices – the underlying index’s value, the option’s strike price, time until expiration, volatility, interest rates and dividends.
The prices of index calls and puts prior to expiration reflect both intrinsic value and time value. The most important consideration is the index value compared to the strike price of the option. This determines whether the option is in- or out-of-the-money. A call or put that is in-the-money has intrinsic value – the amount the holder would receive upon exercise. The intrinsic value of a 75.00 strike ABC index call is $2.50 if the underlying index is at 77.50 (77.50 – 75.00 = 2.50). Similarly, the intrinsic value of a 75.00 strike ABC index put is $3.25 if the underlying index falls to 71.75 (75.00 – 71.75 = 3.25).
The time value of the option consists of the traded price less the intrinsic value. If a 75.00 strike ABC call is trading at 4-1/4 with the underlying index at 77.50, then its intrinsic value is $2.50 (77.50 – 75.00 = 2.50), and its time value is 1-3/4 (4-1/4 – 2.50 = 1-3/4). Out-of-the-money options have no intrinsic value and thus their premiums reflect pure time value.
Earnings Season is basically over. The only one worth mentioning is Oracle (ORCL) which releases after the Close on Tuesday, September 9.
The real action this upcoming week should be on Wednesday and Thursday. There are two events taking place each day, which have the ability to move the market as a whole.
An hour before the Market opens each day, the Bureau of Labor Statistics will release their monthly Inflation Reports. Wednesday will be the Producer Price Index (PPI). Thursday will be the Consumer Price Index.
Remember President Trump was so disappointed with the Non-Farm Payroll (NFP) Report on August 1 that he fired the head of the Bureau of Labor Statistics. I wonder what he’s going to do if he doesn’t like these statistics this week?
While these two Inflation Reports have the Numbers coming out and the Market Reacting, the other big events on Wednesday and Thursday work in the other direction.
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