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What will the market do next? It's certainly hard to say, and just about impossible to know. With recent global unrest -- such as the war with Iran and the ongoing violence in Ukraine -- along with tariffs and rising inflation due in large part to interruptions in oil supplies, it's reasonable to expect a market pullback.

Even without all that, check out how the S&P 500 (SNPINDEX: ^GSPC) has performed in recent years -- keeping in mind that over many decades, it has averaged annual returns close to 10%:

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Year

S&P 500 Return

2016

12%

2017

21.8%

2018

(4.4%)

2019

31.5%

2020

18.4%

2021

28.7%

2022

(18.11%)

2023

26.29%

2024

25.02%

2025

17.88%

2026*

11.01%

Data source: Slickcharts.com. Returns reflect reinvested dividends.*Year to date, as of May 28, 2026

See? Except for 2022, the S&P 500 has notched double-digit gains in six of the past seven years -- many above 20% -- and it's in double-digit territory for 2026, too. Given all that, it's reasonable to not be surprised if there's a pullback this year or next.

So how might you invest if you expect a pullback? Well, one strategy is to focus on healthy dividend-paying stocks -- because healthy dividend payers tend to keep paying through economic booms and busts. And dividend payers tend to be larger, established companies with relatively dependable income. In other words, they're less likely to be high-flying growth stocks that may fall especially hard in a market crash or correction.

When it comes to investing in a bunch of dividend payers, it's hard to beat the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) -- which is a dividend-focused exchange-traded fund (ETF).

The Schwab U.S. Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 Index, which comprises about 100 carefully selected stocks with track records of paying dividends for at least 10 years -- and that also appear to be financially strong companies. Here's how the ETF has performed in recent years:

ETF

Recent Yield

Five-Year Avg. Annual Return

10-Year Avg. Annual Return

15-Year Avg. Annual Return

Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD)

3.3%

8.73%

12.87%

13.30%*

Vanguard S&P 500 ETF (NYSEMKT: VOO)

1.1%

13.96%

15.51%

15.05%

Data source: Morningstar.com, as of May 27, 2026. *from the earliest available date

Many dividend-focused funds haven't grown in value so briskly, and the ones that have tend to sport lower dividend yields. This ETF offers a great mix of both income (a recent 3.3% yield!) and growth.

Here are the ETF's recent top holdings, which will give you an idea of the kinds of solid, dividend-paying companies it invests in. These 10 recently made up about 44% of the fund's value -- so if you like these companies, you'll have a meaningful position in them:

Stock

Weight in ETF

Qualcomm

6.64%

Texas Instruments

6.24%

UnitedHealth Group

5.02%

Coca-Cola

4.01%

Merck

3.87%

Chevron

3.86%

Verizon Communications

3.68%

ConocoPhillips

3.57%

Procter & Gamble

3.51%

PepsiCo

3.46%

Data source: Morningstar.com, as of May 27, 2026.

If you like what you see, take a closer look at this promising ETF.

Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this:

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*Stock Advisor returns as of May 30, 2026.

Selena Maranjian has positions in Procter & Gamble, Qualcomm, Schwab U.S. Dividend Equity ETF, and Verizon Communications. The Motley Fool has positions in and recommends Chevron, Merck, Qualcomm, Texas Instruments, and Vanguard S&P 500 ETF. The Motley Fool recommends ConocoPhillips, UnitedHealth Group, and Verizon Communications. The Motley Fool has a disclosure policy.

The Dividend ETF Built for Whatever the Market Does Next was originally published by The Motley Fool