I’m a big believer in boosting your total return through stock dividends. While you still face market risk — stocks will get hurt if interest rates rise or there’s a sell-off — stock dividends are a good way to combine yield and growth. There’s no shame in hunting for individual high yielders, but I prefer to buy them in a package through exchange-traded funds (ETFs). Some of the best-returning stocks are included in ETF holdings, but not all ETFs are equal.
Ideally, you want companies that are growing their dividends and offer diversification through several industry holdings. Four ETFs fit the bill: Vanguard Dividend Appreciation (VIG) yield: 2.0%, iShares Dow Jones Select Div. index (DVY) yield: 3.0%, SPDR S&P Dividend (SDY) 2.3%, Vanguard High Div. Yield (VYM) 2.86%. What do all of these funds have in common? They have the most assets of all of the ETFs investing in dividend-paying stocks.
Source: Forbes
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