As the Economy is being squeezed, it's a good time to focus on greater diversity. I believe there are few better ways to accomplish this than ETF's. I'm posting my favorite's at the moment that pay dividends with yield exceeding the ten year treas and pay their dividends on a monthly basis.
JPMorgan Equity Premium Income ETF (JEPI)
This is a newer ETF but JP Morgan is a respected and seasoned name in the Industry. At the time, their Dividend is > 9%. The fund invests 80% in the S&P 500 for security and Beta growth or declines. In addition, the fund employs the other 20% for growth through actively managed derivatives. There are similar funds but this one is delivering a lot of income. I'm leveraging most of the money invested in a family portfolio towards this particular fund (40%).
iShares Preferred and Income Securities ETF (PFF)
My second pick, allotted 30% of my monthly allocation, is a Preferred Stock Powerhouse focusing on investing 80% of assets in the ICE Exchange-Listed Preferred and Hybrid Securities Index. Currently delivering Monthly Dividends and a return of 5.11% (SEC 30 Day Yield).
ISHARES TIPS BOND ETF (TIP) (Click for: Nasdaq Dividend History)
The rest of my ETF choices are equally weighted with 10% of my Investment allotment. But the first pick, the TIP ETF has provided attractive returns. The Fund invests in Treasury Inflation Protected Bonds and pays a monthly dividend currently yielding 6.11%.
Inflation protected bonds adjust according to the Consumer Price Index. I-Bonds are another option, through Treasury Direct, for this level of Inflation Protection. I consider this the, "Modern Gold" (I-Bonds that is). One should be cautioned and understand that the Bonds behind this Investment have adjustable Interest rates and can down. One should be even more cautioned that the Fed Chair has actively managing rates with a focus on reversing the current inflation trends. I don't know how else to spell out the risks but I, personally, believe we are going to see reductions in returns through a lot of investments. Yes, I believe you will not be receiving those happy messages in the mail about how well investments are appreciating in value (Or your home). In a year, I'm guessing there will be a lot of letters saying returns are being reduced because of a bad economic environment.
On a good note, there are several favorable factors to TIP rather than buying Treasury Bonds. If you decide not to reinvest the Dividends, each month you will have income. You can enter and exit the investment at your leisure without awaiting redemption periods or maturity. I encourage anyone to look at the Dividend History above. These fluctuate quite significantly. I mean toss out the 10% acceptability idea!
I don't think this needs much introduction but I feel compelled. If you don't have an allotment in this fund, you should stop managing your own funds. Yes, close your eTrade account (or whichever of those other petty Investment platforms you might be using that exploit ignorance...) call Morgan Stanly, JP Morgan, Vanguard, or Goldman Sachs and let them handle your money. If you simply never heard of VOO, let it be known you should be buying this all your life! Give it to your children that don't like doing research too! It's simple. It's brilliant. It's hard to beat!
This mindless yet rewarding investment was derived from a Vanguard Mutual Fund created by the founder, Jack Boogle. It simply buys most of the companies listed in the S&P 500. There are variants to this fund. I like VOO and SPY. The S&P 500 is a list of the largest companies by Market Cap... 500 of them... You can forget trying to determine which stage of a Businesses life, "They're in (Growth and Value theories)," or comparing Net Income and Liability growth rates over a duration of time. This is a, "Platinum Investment," in my opinion (better than gold). Many Investors will base the performance of funds, or the S&P 500 itself, as their standard deviation. Meaning, if you lost 10% and the S&P is down 11%, "You're beating the Market" by 1%. Likewise, if you're up 11% and the S&P 500 is up 10%, "You're beating the Market" by 1%.
It is a good policy, or strategy, to invest in a low cost S&P 500 fund then conduct research on individual components to identify which companies will likely outperform the rest of the Index. Click here to see that actual S&P Index (Not the fund or exactly what is purchased).
You are not likely going to gain great wealth fast or have a lot of monthly income from dividends. This is a more secure investment that will grow with the macro economy and throughout your lifetime give stability.
Vanguard Intermediate-Term Corporate Bond Index Fund (VCIT)
Corporate Bonds are currently trailing Treasury Bonds and here is an example. VCIT seemed fitting after influences I had from reading Benjamin Grahams, Intelligent Investor (Quite a dated book but a good read for reasoning or logic). VCIT is trading at their historical bottom. In addition, yields should increase (My thoughts) going forward. Currently paying a monthly dividend at 2.79%, this is a favorable Investment.
The investment seeks to track the performance of a market-weighted corporate bond index with an intermediate-term dollar-weighted average maturity. The fund employs an indexing investment approach designed to track the performance of the Bloomberg U.S. 5-10 Year Corporate Bond Index. This index includes U.S. dollar-denominated, investment-grade, fixed-rate, taxable securities issued by U.S. and non-U.S. industrial, utility, and financial companies, with maturities between 5 and 10 years. Under normal circumstances, at least 80% of the fund's assets will be invested in bonds included in the index.
As always, Investments are risky. My Thoughts do not mean you will not lose money on these investments. Conduct research and identify your own goals. The preceding is my thoughts on investments that help augment income.
