Dividends4Life: Beat Wall Street With These 6 Dividend Payers

The Vanguard High Dividend Yield ETF (VYM) has outperformed the S&P 500 over the past five years (83.4% cumulatively versus 81.6%). It pays a 3.4% yield today, which is certainly better than the S&P’s paltry 2.1% payout. But VYM can leave you holding an unexpected tax bill this time of year. Even if you didn’t sell your shares of the fund in 2015, its realized gains can be passed onto you. The IRS doesn’t care if you yourself sold shares in the fund – it watches to see if the portfolio managers sold their holdings for profits during the year.

To control your tax situation, avoid management fees, collect your own dividend checks, AND beat the market, here’s a better idea – cherry pick and buy the best issues yourself. After all, it’s easy for you to beat VYM and S&P with a little bit of stock curation. In fact, we can do this simply by shopping from VYM’s top six holdings. We’ll buy five, and pass on the sixth: Microsoft Corporation (MSFT), Exxon Mobil Corporation (XOM), General Electric Company (GE), Wells Fargo & Co. (WFC), AT&T Inc. (T) and Johnson & Johnson (JNJ).

Source: InvestorPlace

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