I would like to buy an investment vehicle to earn high dividends. If it appreciates, that would be a nice bonus also. Could someone tell me the recommended way to get a high dividend without excessive risk? Is a dividend ETF the way?
Best way to earn dividends?
- Thread starter hatesilicone
- Start date
Covered Call ETFs like ZWC, ZWU are high yielding and provide some shelter from risk. However, in most cases, high yields Dividends tend to provide less growth- capital appreciation. You could purchase dividend aristocrats stocks that provide organic dividend growth in addition to potential capital growth
Most of the high yielding ETF's sell calls to assist in obtaining that high yield. By selling calls the upside in the ETF price is considerably limited. One that I like is HHL [ health care leaders] which uses the selling calls strategy but yields approximately 9%, paying monthly distributions.. They hold 20 of the largest health care stocks at approximately 5% each so it looks relatively safe and in fact yield has remained constant - the price of the EFT has not increased a lot over time. The manager of the fund, Paul MacDonald, appears on Marketcall on Bloomberg BNN occasionally which would indicate that they think that he is knowledgeable in the field.
Why do you want to buy a portfolio with high dividend yield? The risk has nothing to do with dividends as there is a trade off between dividend and capital gain yields, not between dividends and risk
