3 ETFs That Work Better Together for Dividend Investors
Combining different dividend stock selection strategies can produce an elite portfolio.
Overview
When people try to construct a portfolio, a lot of them end up instead building a collection of recent high-performing funds.
The problem with that is that there's often a high overlap across holdings that defeats the purpose of diversifying. Right now, that's a big problem for anyone who owns an S&P 500 ETF, a growth ETF, and a tech ETF. Look at the top 10 holdings in those funds. They're mostly the same.
Details
The same principle applies to dividend ETFs. You don't just want a bunch of high-yield funds, nor do you want a collection of just the best performers. You want to use ETFs that build off of each other's strengths and give you all the benefits of their respective strategies while minimizing downside risk.
Source
Originally published at www.fool.com.