As part of our recent discussion on dividend investing and individual stocks (Dividend Aristocrats). Now I would like to highlight passive index-style ETF dividend investing; these ETFs aim to track an index. Like most ETFs, dividend ETFs typically carry low expense ratios; additionally there may be commission-free trades available via an online investment account for trading these ETFs.
While choosing individual stocks does limit some freedom, this might actually be beneficial since most of us are terrible stock pickers.
Advantages to ETF investing over individual stock trading:
Instant diversification, which is especially critical given that some of the highest yielding dividend stocks tend to be among the riskiest investments. And investing through commission-free ETF trading could reduce trading fees as opposed to investing through individual stock investments.
An index investing approach that’s simple and hassle-free; just add more funds when necessary. And by owning several ETFs instead of individual stocks, record keeping on dividend payouts becomes less of an administrative hassle.
Tax-Efficiency.
To help get you started on this path towards tax efficiency, I decided to compile a list of some of the top dividend ETFs available on the market and divide them into 3 distinct categories – domestic, international and sector. Each ETF’s name, ticker symbol, yield and expense ratio will be highlighted along with any changes that occur over time – which may or may not occur over time.
Remind yourself not to chase yields!
Expense ratios and yields as of 1/28/23 can change rapidly; to stay up-to-date make sure to do your research and check back frequently for updates.
+ There are no comments
Add yours