Lux Investing
could someone recommend a good high-yield dividend-paying ETF?
i'm a faithful suze orman viewer, and i've heard her mention high-yield dividend-paying ETFs as a good way to invest. my plan is to dollar cost average with an investment of a few hundred dollars each month, and to do so consistently for the long haul. is there a solid fund someone could recommend i start and stick with? is this even a good idea?
Public Comments
- work from home
- Not sure of ETF's. However, look into PWE stock. It has @ 20% dividend yield.
- I have been watching for exactly the same thing for several months. The problem is that most of the reporting so far is based on the dividends declared in the last quarter of 2008. So, they include some results from before the "crunch" and some shortly after which are unreliable due to "momentum". My advice would be to wait until the dividend results from the first quarter come in around early April. Then, you will know who are still in a good position to pay. But be careful to note the effective date of the data since some may still be reporting year end 2008 results and some do not report quarterly (esp foreign ETFs). Also, be careful of the currencies and the composition of the ETF. The highest yielding ETFs right now contain a very high percentage of financial companies who have been so "smashed" that their returns look very high. Of course, if they go broke, their return will be zero. Also, the dollar is starting to drop and will continue to do so. So, an ETF in dollars (or euros which is also a problem) will show the effects of a devaluation over time. So, Suze is on a good track, but the key is how to choose what is a high yielding ETF based on the results available. Wait a bit, then choose one. In the meantime, I would opt for an energy-based ETF in a foreign currency. Take a look at ENY from Canada, for example. But, I am waiting for the April earning results before doing anything substantial on value stocks.
- Check out this list of all dividend etfs. DVY is one of the most popular http://yorkinvestmentreport.com/2009/02/19/dividend-etfs/ York http://www.yorkinvestmentreport.com
