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Looking for Stability? Buy This ETF That Focuses on Dividend Growth Stocks
If you're worried about the markets and are looking for some stability, a good strategy may be to invest in dividend stocks. Not only will you generate recurring cash flow for your portfolio, but those are among the safest businesses you can invest in. They're usually very profitable and generating some strong cash flow.
An exchange-traded fund (ETF) with a focus on dividends can be a great way option for long-term investors to consider right now. The Vanguard Dividend Appreciation Index Fund ETF Shares (NYSE Arca: VIG) holds some of the top income stocks you'll find on the stock market today. It includes top names such as Microsoft (NASDAQ:MSFT), JPMorgan Chase (NYSE:JPM), Johnson & Johnson (NYSE:JNJ), and Walmart (NYSE:WMT). It also offers investors some solid diversification, with no sector outside of industrials making up 20% of its total weight. From financial services to healthcare to tech and many others, the fund offers a great mix of some of the safest and most stable investments to own.
The fund has a tiny expense ratio of just 0.06% and it yields around 1.5% annually. But over time, you're likely to earn much more from the stock. That's because the ETF focuses not just on dividend stocks but also those that regularly grow their dividends. A rising dividend can help offset the impact inflation has on your recurring income.
For investors looking for a safe place to park their money amid what could be a volatile year in 2022, the Dividend Appreciation Index ETF can be an excellent option.