Dividend Stocks vs Dividend ETF’s

I know it’s somewhat rare for an investor to be using both dividend stocks and ETF’s. I must be the exception then and I certainly think more should try it. It should not be a choice between the 2 but rather how much mony to invest in ETF’s you should add to complement your dividend portfolio. There are several asset classes that are important enough to be part of your portfolio (bonds, international stocks, etc) but difficult to buy outright. I’ll certainly discuss this in more details eventually.

By building a dividend porfolio, you are effectively performing active management. You are trying to select which stocks will do better than the overall index or market. Odds are that you’ll fall short on that mission. It’s sad but true. By how much is hard to say. But those buying an index ETF know how far off they’ll be (more or less)… by selecting dividend stocks you are betting that you’ll do better. I’m not saying you won’t succeed, but I do think that this part of the argument is too rarely mentioned when looking at the fees involved in the construction of an income portfolio.

Source: Guru Focus

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