Chapter 12
Dividend Funds: The Search for Steady Money
IN THIS CHAPTER
Examining the role of dividends in your portfolio
Determining the potential payoff of dividend funds
Understanding how to best employ dividends
The check is in the mail. When you know it’s true (it isn’t always), there are perhaps no sweeter words in the English language. To many investors, the thought of regular cash payments is a definite turn-on. Always willing to oblige, the financial industry of late has been churning out “high-dividend” funds — both mutual funds and ETFs — like there’s no tomorrow.
The idea behind these funds is simple enough: They attempt to cobble together the stocks of companies that are issuing high dividends, have high-dividend growth rates, or promise future high dividends. In this section, I spell out some of the high-dividend ETF options and then debate the value of investing in them.
But before I get to that, let me say to the one poster on the Bogleheads online forum who read an earlier edition of this book, that Russell Wild does not hate dividends. I don’t hate dividend ETFs. Not at all. I love dividends. I just don’t think that they are the answer to everything. And I don’t ...
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