Tag: dividend index fund

What is a dividend index fund?

A dividend index fund is a form of mutual fund or ETF that’s designed to follow or match an index, while emphasising dividend-paying stocks.

Dividends are typically cash payouts that serve as a way companies share the wealth they’ve accumulated through operating the business. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

Dividends are an important contributor to long-term gains, and dividend-paying stocks tend to expose investors to less risk than non-dividend-payers. That’s why the majority of an investor’s stocks should be dividend-payers at all times. As investors get older and closer to retirement, the proportion of dividend-paying stocks in your portfolio should be raised, to cut risk and improve the stability of your investment results.

For a true measure of stability with dividend index funds, focus on companies that have maintained or raised their dividends during economic and stock market downturns. These firms leave themselves enough room to handle periods of earnings volatility. By continually rewarding investors, and retaining enough cash to finance their businesses, they provide an attractive mix of safety, income and growth.

Control your stock trading risk by following TSI Network and using our three-part Successful Investor strategy:

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

Discover how to build your portfolio with the best dividend stocks when you read this FREE special report The Best Canadian Dividend Stocks to Buy.

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Two Canadian ETFs that profit from rising markets

May 16, 2013||ETFs

Most U.S. markets have risen lately, while Canada’s resource-heavy Toronto Stock Exchange has lagged. But as always, both remain subject to unexpected downturns.

One way to profit from rising markets is to add exchange traded funds (ETFs) that track major stock indexes to your portfolio… Read More

Easy ways to track the top stock indexes

May 3, 2013||How To Invest

Most U.S. markets have risen lately, while Canada’s resource-heavy Toronto Stock Exchange has lagged. But as always, both remain subject to unexpected downturns. Even so, the long-term outlook is for higher stock prices. One way to profit from rising markets is to add exchange traded… Read More

Easy ways to track the major indexes

October 5, 2012||How To Invest

Most stock markets have risen lately. But as always, they remain subject to unexpected downturns. Even so, the long-term outlook is for higher stock prices.

One way to profit from rising markets is to add exchange traded funds (ETFs) that track major stock indexes to your… Read More

Tap into a market rebound with ETFs

June 8, 2012||How To Invest

Most stock markets are down lately due to investor worries about a potential eurozone breakup, sluggish U.S. growth and a slowdown in China.

Still, the long-term outlook is positive. One way to profit from a rebound is to add exchange traded funds (ETFs) that track major… Read More