ETFs ‘Excellent’ for Investing in Dividend Stocks

Looking to invest in dividend stocks? If so, you might consider doing it through exchange-traded funds (ETFs). “Whether you prefer stocks with high payouts or stocks with growth potential, the fund structure is an excellent way to invest in dividend-paying stocks because of its potential for low-cost diversification,” Morningstar analyst Michael Rawson writes on Morningstar.com. Many investors are turning to dividend stocks as a source of income now that interest rates are near record lows. Many blue chip stocks are available with yields over 3 percent.

When it comes to choosing ETFs, investors hoping for growth can look at the Vanguard Dividend Appreciation ETF (Ticker: VIG), he says. And those looking for lofty current dividend yields can look at Vanguard High Dividend Yield Index ETF (VYM), Rawson writes. Many analysts are beginning to call for a drop in stock prices. Dividend shares can be quite beneficial in such an environment, providing you with some income to offset capital losses and often sliding less in value than other stocks.

Source: NewsMax

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