Should You Forget Picking Individual Stocks and Buy This Index Fund Instead?
Managing a stock portfolio is a lot of work; dividend investors can let this index-based ETF handle that work for them.
Should You Forget Picking Individual Stocks and Buy This Index Fund Instead?
Overview
Picking stocks at random isn't really a thing for investors who buy individual stocks. It is more like finding a few attractive needles in a haystack. That takes a lot of effort. And then you have to monitor your portfolio to ensure that none of the businesses you own go sideways in some way. That's a lot of effort, too.
If you are a dividend lover, Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) could be your index-based solution to getting out from under all of that work. Here's why.
Details
From a big picture perspective, Schwab U.S. Dividend Equity ETF likely does what you would do if you invested in individual dividend stocks. Essentially, the index it follows seeks to identify well-run companies that are growing, have rising dividends, and offer attractive dividend yields. That is, at its core, what most dividend investors are trying to do. To be fair, with 100 stocks in the index, the yield could be lower than you would like. But at 3.2%, it is more than three times the yield of the S&P 500 index (SNPINDEX: ^GSPC). That's hard to complain about, especially if you are getting that yield without putting in much effort.
Source
Originally published at www.fool.com.
