Under the "storm" in the US stock market, investors are seeking refuge in high-yield stocks!
Analysis indicates that holding high-dividend stocks allows investors to gain profits when stock prices rise, while regular dividend payments help cushion declines. The components of the S&P 500 Dividend Aristocrats Index, Coca Cola and Johnson & Johnson, are expected to achieve double-digit percentage growth in 2025. In contrast, recent market star stocks such as NVIDIA and Broadcom have both fallen more than 15% this year
Under the dual pressure of uncertainty in U.S. trade policy and expectations of economic slowdown, Wall Street investors are turning to a classic defensive strategy: high-dividend stocks. As technology stocks suffer heavy losses, these "boring and conservative" established companies are showing unexpected resilience, providing a safe haven for investors.
Data shows that since 2025, cash-rich dividend stocks have significantly outperformed the broader market. The Schwab U.S. Dividend Equity ETF (SCHD) and the SPDR S&P Dividend ETF have both risen over 4% this year, while major indices have fallen into negative territory during the same period. The S&P 500 Dividend Aristocrats Index (which includes companies that have raised dividends for 25 consecutive years) has a return of about 3.5% this year.
In terms of individual stocks, high-dividend-paying companies have performed well. The S&P 500 Dividend Aristocrats Index constituents Coca Cola and Johnson & Johnson both achieved double-digit percentage growth in 2025. In contrast, recent market stars like Nvidia and Broadcom have both fallen over 15% this year.
This trend has become more pronounced as the S&P 500 index recorded its worst performance since last September last Friday, driven by tariff threats from the Trump administration. The behavior of investors seeking safe assets is reflected not only in dividend stocks but also in traditional safe-haven assets such as gold and U.S. Treasury bonds.
Earlier this year, trader John Bevis predicted that policy uncertainty could lead to market volatility. He reduced his positions in large tech companies like Tesla and Nvidia in January and February, opting instead to buy shares of Coca Cola and Procter & Gamble:
"In an environment of rising inflation, people are not going to buy more Teslas. In the face of this uncertainty, you have to stick with those solid companies that have been around for 100 years."
Holding high-yield stocks allows investors to benefit from price appreciation while regular dividend payments help cushion declines. Supply chain planning manager Jacob Kuehl stated that quarterly dividends can provide safe returns in an increasingly uncertain market, and he believes now is a good time to become an income-focused investor. He also predicts:
"The market seems very bubbly and very tense; I bet people will turn to safety."