Dividends4Life: Looking to boost the income in your portfolio?

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Looking to boost the income in your portfolio?

Posted by D4L | Saturday, April 09, 2011 | | 0 comments »

If you're looking to boost the income in your portfolio, exchange-traded funds can help you get the job done. But while plenty of ETFs pay decent yields, one ETF offers truly amazing payouts to its shareholders. Below, I'll tell you the secret behind this top-yielding ETF and share some insight into how its strategy can help you with your own investing. Not so long ago, if you wanted to get income from your portfolio, you first turned to bonds and other fixed-income investments. Most bonds don't offer great prospects for capital appreciation, but much of the time, the income they generate compensates for their lack of growth potential. As a result, bonds have been favored by conservative investors who are more concerned with personal cash flow than with growing their portfolios.

But over the years, interest rates on bonds and similar investments have fallen dramatically. Go to a bank for a CD or buy a Treasury bond, and you'll be lucky to get enough of a yield to match inflation going forward. That has made them much less useful as income-producing investments. As a result, investors have increasingly turned to stocks and stock funds. In many cases, you can get better yields from dividend-paying stocks than you'll find on bonds -- along with the potential for future growth if stock prices continue to rise. With the rise of various types of ETFs, it was inevitable that fund companies would create dividend-stock ETFs. In fact, investors now have a wide range of dividend ETFs to choose from, using different strategies that emphasize different characteristics.

Source: Motley Fool

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