How can I stop the pain and make money in this nightmare market? Buffa says

There is complete panic in the market.

The S&P 500 is down 18% today. The Nasdaq has a wonderful 27% down. Even the Dow Jones – comprising 30 of the most prominent publicly traded companies – is in the correctional zone.

According to Bank of America, there is one thing that could save the stock market in 2022: Corporations can return money to shareholders.

“The best hope for the 2022 bulls lies in the ability of investors to remove অল 7.1 trillion in lazy US corporate cash,” the bank wrote in a note to investors.

Bank of America predicts that repurchases and dividend sharing in the United States – currently at a 12-year low – are likely to move forward.

“We expect companies to face increasing competition for shareholders by increasing dividends and buybacks due to lower profit growth, reduced productivity and reduced profitability.” [capital expenditures]”

To take advantage of a potential payout increase, Bank of America recommends ETFs that focus on dividends, buybacks and free cash flow.

Check out a trio here to get you started.

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Vanguard High Dividend Yield ETF (VYM)

Many companies pay dividends, but some are more generous than others.

If you want to invest in a company portfolio that is characterized by large payouts, consider Vanguard High Dividend ETFs.

The fund adopts a passive, complete replication system to track the performance of the FTSE High Dividend Yield Index. It holds 443 stocks, so it is well diversified.

ETF’s top holdings include household names such as Johnson & Johnson (JNJ) and Procter & Gamble (PG) – companies that have been paying rising dividends for decades.

VYM also boasts a very low spend ratio of 0.06%.

iShares US Dividends and Buyback ETF (DIVB)

Paying dividends is not the only way to return cash to investors. Companies can repurchase their shares. When a company buys its stock back, it reduces the number of outstanding shares, allowing each remaining investor to own a larger share of the business.

If you want to follow the buyback theme, check out iShares US Dividends and Buyback ETF.

The fund tracks the Morningstar US dividend and buyback index, which consists of companies with a history of dividends and share repurchases. Its cost ratio is 0.25%.

At the moment, DIVB holds 319 stocks, the top three holdings being Apple (AAPL), Microsoft (MSFT), and Meta Platforms (FB). In 2021, Apple spent .3 88.3 billion on buybacks, Microsoft 29 29.2 billion and Meta bought নিজস্ব 50.1 billion of its own shares.

Pacer usa cash cow 100 ETF (COWZ)

Free cash flow represents the money that a company generates after paying all costs – including capital expenditures. If a company generates a large amount of free cash flow, it is usually in a good position to return the cash to the investors.

So pacer US Cash Cow 100 ETF is a potentially timely opportunity.

The fund is based on the pacer US Cash Cow 100 Index, which screens the Russell 1000 Index to reach the 100 companies where maximum free cash flow is available. Currently, its top three holdings are Valero Energy (VLO), Dow (DOW), and Occidental Petroleum (OXY).

The index is restructured and balanced on a quarterly basis. COWZ’s expense ratio is 0.49%.

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This article provides information only and should not be construed as advice. It is provided without any warranty.

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