SCHY - SCHY: How The Fed's Policies Make International Dividend Stocks An Attractive Bet

2024-04-22 12:26:29 ET

Summary

• The US Federal Reserve is expected to maintain higher interest rates while other major central banks, such as the ECB and BoE, are likely to shift to lower interest rates.
• The divergence in interest rates presents an opportunity to invest in international dividend stocks, which are expected to outperform their US counterparts.
• The Schwab International Dividend Equity ETF is the recommended investment tool for betting on international interest rates due to its low expense ratio and exposure to developed countries.

Thesis: the FED will be left alone with higher interest rates, and international dividend stocks will benefit

Historically, interest rates in developed countries have followed similar patterns. The US Federal Reserve ((FED)), the European Central Bank ((ECB)), the Bank of England (BoE) and the Bank of Japan (BoJ) oversee four economic areas that represent roughly 50% of the world’s GDP. Up until 2021, these four central banks all followed a Zero Interest Rate Policy ((ZIRP)) and Quantitative Easing ((QE))....

For further details see: