Focus on dividend quality during COVID-19

Article Excerpt

Based on lots of things we’re looking at, we’re still reasonably sure that stock and ETF prices will be higher in a year or two than they are today. But the market rarely goes straight up or down. Instead we should expect a series of abrupt movements in either direction. That volatility is all the more reason for conservative investors to keep a high proportion of their holdings in dividend-paying stocks—or ETFs that hold those stocks. The best dividend stocks provide a consistent dividend yield year after year. That’s key to your long-term investment success, especially in potentially volatile markets. That’s because those dividends can contribute as much as a third of your total return. The supplement starting on page 79 contains more information on the strategies that managers of dividend-focused ETFs use to decide their stock holdings and weights. VANGUARD DIVIDEND APPRECIATION ETF $121.96 (New York symbol VIG; TSINetwork ETF Rating: Aggressive; Market cap: $51.6 billion) invests in dividend-paying U.S. listed companies. The fund selects…

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