When you reach retirement age, you automatically start getting cautious about your investments. You would start favoring the safe investments like bank deposits and try to distance yourself from risky options like shares and ETFs. While you cannot disagree that ETFs have an element of risk in them, it is also true that they are capable of providing great returns in the long term. Hence, analysts recommend that you must invest a portion of your sum in these exchange-traded funds so that you can reap good profits after a few years. There are a few funds that cater exclusively to the needs of retired investors. Read on to know more.
Almost all retired investors are conservative when it comes to choosing their investment choices. However if you are extremely conservative but still want more returns on your investment than what bonds and deposits give you, the most apt ETF for you is the Vanguard Dividend Appreciation ETF (VIG). This fund enjoys a great reputation among the investors because of the prudent choices of stocks that it holds. This fund does not choose stocks that pay high rates of dividend; it chooses stocks that pay consistent dividends. Stocks that pay very high rates of dividend have a significant amount of risk associated with them. Hence the fund only chooses those stocks that have a financial regularity and pay out consistent returns to its investors irrespective of the volatile condition of the stock market, thereby perfectly catering to the needs of the highly conservative investors.
Source: Guru Focus
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