In the world of conservative investing, you can’t “get rich quick.” However, you can get more out of your investments—by picking stock mutual funds that pay dividends or have yields above 1%.
What exactly is a dividend? The dividends come from the underlying companies’ earnings, and they give you a bit of an extra return. Payment schedules can vary, but many issue checks on a quarterly basis.
Why would you want dividend-producing funds in your portfolio? Because they add security. Even in hard times, dividends can help to boost your overall returns. The average dividend yields today range from 1–3%.
Here are some examples of dividend mutual funds. I am NOT recommending you buy or sell these funds; they just serve as an illustration:
Vanguard Dividend Growth (VDIGX)—Yield of 1.86% and has paid dividends consistently for years. T. Rowe Price Dividend Growth (PRDGX)—Yield of 1.24% and has paid dividends consistently for years. Fidelity Real Estate Income (FRIFX)—Real estate mutual funds can be a great boon to a portfolio. This has a yield of 4.82%, which adds income and helps diversify your portfolio.
Stock up. Do you own any stocks or funds that pay dividends?
Galia Gichon will be teaching 4 Weeks to Your Strong Financial Foundation, a four-week LIVE teleclass, starting April 7.
Let the Companies Pay You Comments
- By Galia Gichon
- March 03, 2011