Want Dividends? Try Individual Stocks Instead of ETFs
PRESCOTT, Ariz. ( TheStreet) -- According to the StateStreet Global Advisors Web site the S&P 500 SPDR (SPY) has a trailing yield of 1.98%. Reports on CNBC have it up near 2.25%. Either figure is greater than the yield on the 10-year U.S. Treasury, which yields 1.77%. It is rare when stocks yield more than the 10-year Treasury and no doubt increases the spotlight on dividend paying stocks.
Dividend-based ETFs first came on the scene in 2003 with the iShares DJ Dividend Select ETF (DVY) and the SPDR S&P Dividend ETF (SDY) and started to proliferate when fund provider WisdomTree created an entire product line devoted to dividend investing. Back then, I wrote articles on just about all of the dividend ETFs as they came out and offered this same caution on just about all of them: if anything serious were to happen to the financial sector then the dividend funds would get hit very hard as most of them are very heavily weighted in that sector.
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