SCHD Just Hit a Record High Following Midterm Election Results. I'd Still Rather Buy This Dividend King for Passive Income.
Key PointsThe Schwab U.S. Dividend Equity ETF and McDonald’s are rallying in lockstep with the consumer staples sector.
Midterm election results sent stock market indexes soaring, particularly in healthcare and consumer staples sectors. The Schwab U.S. Dividend Equity ETF (SCHD) followed the trend, hitting a record high in the process. However, it's worth noting that SCHD's gains are due to its rules-based methodology of allocating toward high-yield, industry-leading companies, which can backfire if a leading sector continues producing strong gains.
McDonald's, on the other hand, is a safer bet for passive income due to its reliable dividend increases and stable franchise model.
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