The Schwab U.S.
Dividend Equity ETF (NYSEMKT: SCHD) is where I would be putting new money right now
But the investment case has nothing to do with the construction of the fund itself or its yield. In my opinion, it comes down to the Federal Reserve, interest rates, and inflation. The Fed is holding its benchmark rate at 3.50% to 3.75%, and any cuts to that are likely off the table for the foreseeable future.
Even after June’s headline Consumer Price Index rate came in below expectations at 3.5% year over year, it’s still unlikely to move the Fed off its hawkish tilt. A core inflation rate of 2.6% is closer to the central bank’s target, but it’s still not nearly where it needs to be to bring rate cuts back into the conversation. The other factor that’s giving me pause right now is tech concentration in the S&P 500.