Quality Dividend ETFs For Turbulent Times

U.S. equity markets are going through turbulent times. There is a lot of volatility and uncertainty owing to rising geopolitical risks and political uncertainty. This has increased the appeal of dividend investing.

Geopolitical Risks

Geopolitical risks have been on the rise. North Korea conducted its seventh nuclear test, an Inter Continental Ballistic Missile that flew over Japan, on Sep 14, 2017. Kim Jong-Un’s actions have created huge unrest in a number of Asian economies and the United States.

In response to continuous missile tests, President Donald Trump in his maiden UN General Assembly speech threatened to completely destroy North Korea. This prompted North Korean leader Kim Jong-Un to warn the United States of the "highest level of hard-line countermeasure in history”.

Moreover, North Korea’s foreign minister stated that Trump’s comments indicate that the United States has declared war against North Korea. "Since the U.S. declared war on our country, we will have every right to make countermeasures, including the right to shoot down the U.S. bombers even when they are not yet inside the airspace border of our country," foreign minister Ri Yong Ho said. However, the White House has rejected the accusations.

This latest development made investors flock to safe haven investments and led to a decline in tech stocks (read: Safe Haven Currency ETFs Gain Amid Latest North Korea Threats).

Trump’s Actions

There is increased uncertainty with regard to Trump’s ability to pass the promised legislations relating to tax reform and deregulation. Although economic fundamentals have been strong, there are renewed doubts over the capabilities of the Trump administration.

Trump introduced a new travel ban with restrictions on citizens from eight nations, six of which are Muslim majority. Starting Oct 18, citizens of Chad, Iran, Libya, Syria, Venezuela, Yemen, Somalia, and North Korea will be banned from traveling to the United States. However, people holding permanent residency or visas are exempted from the ban, but cannot renew their visas once they expire.

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