dividend paying etfs- Money Morning - Only the News You Can Profit From.
Yield-seeking investors know that holding the right dividend stocks means they get paid even if the market pulls back.
That's an enticing idea now that the Dow Jones Industrial Average is at a record high.
That's also why Money Morning Global Investing Strategist and editor of the Permanent Wealth Investor service Martin Hutchinson warns that holding only non-dividend payers could hurt investors.
"I find stocks that don't pay dividends rather alarming because there's no way of getting any return from them at all," explained Hutchinson.
His favorite dividend stocks are "heirloom stocks," a select group of 82 stocks listed on the NYSE or Nasdaq with a reliable dividend-paying history.
In the following video Hutchinson explains how to spot heirloom stocks and why they should be an important base of any portfolio. He also shares one of his favorite "heirloom" dividend stocks to buy now.
A Dividend Paying Stock for "Times Like This"
Earnings season teaches us a lot about companies - like which ones have figured out how to successfully navigate in the uncertain economic times we have now. And this earnings season has shown us that there's a dividend paying stock that has not only delivered profits but could increase its already healthy payout.
Money Morning's Shah Gilani joined Fox Business' "Varney & Co." Tuesday morning to talk about this top sin stock that can deliver consistent money to your portfolio.
"[This stock] has a 4.7% dividend yield. I think you have to like anything that provides you income and that has appreciation potential," said Gilani. "[This stock] is always on the top of my list."
This stock delivered blockbuster Q2 profits. Watch this accompanying video to hear everything Gilani has to say about this dividend paying stock that can give your portfolio some profit protection.
Six Dividend Stocks to Hold Forever
Investor. Now there's a word you don't hear much these days. "Buy and hold," they tell us, has gone the way of the dinosaur.
Today, it's all about the fast money. In the market, out of the market... this stock, that stock...
Of course, that's perfectly fine for traders. The good ones earn small fortunes that way. But for folks who don't have that kind of experience, being nimble is simply an invitation to be whipsawed by the markets.
You may be one of them.
For instance, are you fed up with stock recommendations that only seem to last a couple of weeks?
Or do you constantly find yourself buying on a day when the market is hot, because you feel enthusiastic, only to end up selling on a bad day, because the same stock suddenly looked less attractive?
If so, there's a solution to all this day-to-day madness. Despite the rumors of its demise, there are still stocks you can buy and hold forever.
Of course, seasoned income investors have known this for years. That's why the truly rich don't spend their days watching the financial news and trading stocks. They're too smart for that.
They know that investing in steady-income producing dividend stocks is just as rewarding over the long haul.
How to Pick the Long-Term WinnersHowever, picking successful dividend-paying stocks is not as simple as buying only the stocks with the highest yield. In fact, the stocks with the highest yields are often the ones that trip up investors the most.
When it comes to buying stocks you can truly hold forever, what's important is the company's track record.
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These Four Dividend Stock ETFs Can Add Pop to Your Portfolio
Investors who like dividend-paying stocks should love exchange-traded funds (ETFs) that focus on dividend stocks - they provide the same benefits but with diluted risks.
With the stock markets gyrating and traditionally "safe haven" investments like U.S. Treasuries offering historically low yields, dividend stocks offer the lure of a reliable income stream.
"Dividends provide you with an income far better than you can get in bonds and with considerable protection against a down market," said Martin Hutchinson, Money Morning's Global Investing Strategist.
Yet dividend stock ETFs also provide some measure of protection from a financial crisis at an individual company.
"Dividend ETFs mitigate the risk a company might commit the ultimate sin: suspend or cut a dividend," Matt Krantz writes for USA Today. "By owning one ETF, which owns shares of hundreds of dividend-paying stocks, if just one company halts its dividend, the impact to the investor will be relatively small."
ETFs own stocks like mutual funds, but are traded on the markets in "units" just like stocks. The units can be created (requiring the fund to buy more shares of the underlying stocks) or destroyed (requiring the fund to sell shares) to accommodate investor demand.
The Power of DividendsMany investors underestimate the power of dividends. Hutchinson pointed to a study by Yale economist Robert Shiller that showed that dividends accounted for 67% of the average real return on common stocks from 1889 to 1998.
"While stock prices have been plunging, dividend payments are rising," Hutchinson said. "Through Aug. 31, 243 companies in the Standard and Poor's 500 Index increased or initiated a dividend payment. In fact, dividend payments are expected to end 2011 up 18% from 2010."
Companies that manage ETF funds have created an increasing number of dividend stock ETFs to serve investors hungry for ways to add more dividend income to their portfolios.
The Four Best Dividend Stock ETFsStandard & Poor's Capital IQ Equity Research recently analyzed 1,100 ETFs to see which of the funds that focused on dividends had the best yields and excelled in several other criteria, including performance, risk, credit rating and volatility (based on its standard deviation).
That narrowed the list to 13 funds, of which most were general funds. Four of those ETFs, however, are specifically focused on dividend stocks.
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