Core Insights - Dividend stocks are expected to rebound in 2026, particularly those focused on balance sheet quality and long-term dividend growth [1] - Historically, dividend stocks have enhanced risk-adjusted returns, reduced portfolio volatility, and provided steady income streams, making them suitable for both income and growth investors [2] Economic Outlook - The U.S. economy is projected to remain strong, with real GDP growth expected to rise from 1.7% in 2025 to 2.3% in 2026, despite a recent quarter-point cut in the federal funds rate [3] Investment Opportunities - Dividend ETFs may present opportunities as economic conditions shift, with potential investor interest in defensive strategies during economic slowdowns or inflationary pressures [5] - The Schwab U.S. Dividend Equity ETF (SCHD) focuses on stocks with consistent dividend histories and strong fundamentals, which may outperform in a market rotation away from growth stocks [5][7] - The WisdomTree U.S. Quality Dividend Growth ETF (DGRW) targets companies with strong fundamentals and emphasizes total dividends paid, positioning it well for both growth and value investors [9][10] - The Vanguard International High Dividend Yield ETF (VYMI) has performed well, delivering a 35% return year-to-date in 2025, and may benefit from a rotation away from tech stocks, given its low allocation to that sector [12][13]