Core Viewpoint - The choice between the Vanguard Dividend Appreciation ETF (VIG) and the Schwab U.S. Dividend Equity ETF (SCHD) hinges on the investor's perspective on the current market rotation, particularly between dividend growth and high yield strategies [1][2]. Group 1: ETF Characteristics - The Vanguard Dividend Appreciation ETF tracks the S&P U.S. Dividend Growers Index, focusing on large-cap stocks that have increased their annual dividends for at least 10 consecutive years, while excluding the top 25% of yields to avoid yield traps [3][4]. - The Schwab U.S. Dividend Equity ETF follows the Dow Jones U.S. Dividend 100 Index, targeting companies of all sizes that have paid dividends over the past decade, using metrics like return on equity (ROE) and cash flow to debt to select the top 100 stocks [5][6]. Group 2: Performance and Strategy - The Vanguard ETF's market-cap-weighting strategy has led to significant holdings in major tech companies like Broadcom, Microsoft, and Apple, contributing to its past performance, but raises concerns if the market shifts away from tech [7]. - The Schwab ETF has underperformed in the past three years due to its strategy being out of favor, but its approach of incorporating dividend growth history and quality metrics is seen as beneficial for identifying high-quality stocks [7][8]. Group 3: Current Market Positioning - The Schwab ETF is viewed as a better investment currently, given the uncertainties in the economy and labor market, suggesting a potential shift towards more defensive investments [8].

Take a much closer look at the alternative data sources, the private data sources, the alternative data that I mentioning there. We've had a lot of success scraping the wage inflation data or the wage posting data and extracting from it wage inflation measures. And one of the most important stories that I think everyone is aware of it when you came out of Covid, it was the bottom and that led the wage gains and that shifted.And we've been in a period where, you know, you guys have talked about it, the K-sha ...

Interest Rates and Market Expectations - The market had overly optimistic expectations for Federal Reserve easing, which were not supported by compelling data, leading to a return to equilibrium with anticipated rate cuts next year [2][3] - The 10-year Treasury yield has increased by more than 15 basis points, attributed to a more hawkish stance from Fed Chair Powell [3] Inflation and Investment Strategies - There is a belief that inflation risks are skewed to the upside for the next 6 to 12 months, suggesting a need for exposure to Treasury Inflation-Protected Securities (TIPS) [5][6] - TIPS currently offer a positive real return, making them an attractive investment option [5] Federal Reserve's Future Actions - It is unlikely that the Federal Reserve will implement another rate cut in December, with potential for one or two cuts in 2026 depending on economic data and inflation trends [6][7] Fixed Income Market Performance - The fixed income market is experiencing solid returns across various sub-asset classes, with international bonds yielding a total return of 9.5% year-to-date [8] - There is a renewed opportunity for investment in international bonds, particularly as the dollar weakens [9][10] High Yield Market Concerns - Caution is advised regarding high yield investments, particularly in the leveraged loan market, which may contain lower-quality assets [10][11]

You said you have your lowest exposure to credit in 40 years. The the kind of on the other times you've been underweight or the leaning crisis and right before COVID. So what does that mean practically for your investments.Does that mean that you're completely getting away from credit. Are you in investment grade but still at the lowest level. Are you moving into high yield.What does that exactly mean. Sure. First of all, if you look at the investment grade universe according to the index, it's almost $30 t ...

Market & Economic Assessment - The Fed is in a difficult position, balancing inflation pressures with calls for rate cuts, while the economy grows between 2% and 3% [2][3] - Current market conditions, including high equity prices, low volatility, and tight credit spreads, are atypical for a rate-cutting cycle [3][4] - Speculative behavior is prevalent, with tight credit spreads making fixed income investments interest rate sensitive [5] - Fiscal policy is challenging, with $37 trillion in debt and a $2 trillion deficit, while the Fed maintains a $7 trillion balance sheet [7] - Inflationary pressures persist, particularly in construction costs and wages, making a return to zero rates unlikely [8] - The long end of the yield curve signals concerns about the US fiscal situation, as the 30-year Treasury yield is higher than when Fed funds were 51/8% [10][11] Investment Strategy & Risk - The administration's policies favor risk assets, but this may not be favorable for fixed income [6][24][27] - Investors should be cautious about taking on excessive risk in fixed income portfolios, particularly through high yield credit at tight spreads [6][15] - Private credit funds raise concerns, especially the push to include illiquid assets in liquid investment vehicles, echoing concerns from 2007 [15][16][18] - Meme stock activity indicates that investors are unafraid, with one penny stock accounting for 15% of stock exchange volume [20][21] - While the overall risk environment is favorable, it is susceptible to shocks, requiring careful monitoring and liquidity [26][27][25]

Market Outlook - Shrikumar Global Strategy predicts a 10% correction in the market by the end of the year due to various macro factors [1] - The potential for increased inflation, as indicated by Jerome Powell, could negatively impact NASDAQ and S&P [3] - Corporate earnings may not be as strong as before, contributing to a potential reality check in the earning season [4] Macroeconomic Factors - Geopolitical risks, including the Iran-Israel war, and uncertainties surrounding tariffs and the fiscal deficit, are key concerns [2][3] - The divergence between the optimism in equities and the 10-year yield suggests that macroeconomic influences are not being fully accounted for by the market [4] - High yield credit performing well indicates a higher risk appetite, comparable to equities [4][6] Monetary Policy & Banking - Changes to bank loan requirements could impact the amount of treasuries bought by banks, potentially lowering yields and debt service costs [7][8] - Reducing bank reserves could diminish the Federal Reserve's leverage in stimulating or cutting back the economy [8][9] - The need to finance the fiscal deficit at a reasonable cost may be a primary driver behind changes in bank loan requirements [10]