Daily Investment Advice

Category: Cash Flow for Retirement

  • Top 3 Real Estate Investment Trust (REIT) ETFs to Consider in 2024

    Top 3 Real Estate Investment Trust (REIT) ETFs to Consider in 2024

    Real Estate Investment Trusts (REITs) offer a way for you to participate in the real estate market without having to buy or manage properties yourself. REIT ETFs (or exchange traded funds) take this a step further by allowing investors to buy a diversified portfolio of REITs in a single transaction. Here are three REIT ETFs that are worth considering in 2023.

    1. Vanguard Real Estate ETF (VNQ)

    The Vanguard Real Estate ETF is one of the largest and most popular REIT ETFs in the market. It seeks to track the performance of the MSCI US Investable Market Real Estate 25/50 Index, which includes stocks of companies involved in real estate rental, management, and development, as well as REITs.

    The fund has a diversified portfolio of REITs, with exposure to a wide range of property types, including residential, office, industrial, retail, and healthcare properties. The fund’s largest holdings include American Tower Corp, Prologis Inc, and Equinix Inc.

    The Vanguard Real Estate ETF has a low expense ratio of 0.12%, making it a cost-effective choice for investors looking to gain exposure to the real estate sector.

    2. iShares U.S. Real Estate ETF (IYR)

    The iShares U.S. Real Estate ETF seeks to track the investment results of the Dow Jones U.S. Real Estate Index, which measures the performance of the real estate sector of the U.S. equity market. The fund invests in a variety of REITs, with a focus on companies that are involved in the real estate industry and other real estate-related investments.

    The fund’s largest holdings include American Tower Corp, Crown Castle International Corp, and Prologis Inc. The fund has exposure to a variety of property types, including residential, office, industrial, and specialty properties.

    The iShares U.S. Real Estate ETF has an expense ratio of 0.42%.

    3. Schwab U.S. REIT ETF (SCHH)

    The Schwab U.S. REIT ETF seeks to track the total return of the Dow Jones U.S. Select REIT Index. The fund invests in a variety of REITs, including those involved in the ownership and operation of real estate, such as residential, office, retail, and industrial properties.

    The fund’s largest holdings include American Tower Corp, Prologis Inc, and Simon Property Group Inc. The fund offers exposure to a variety of property types, making it a good choice for investors looking for diversified exposure to the real estate sector.

    The Schwab U.S. REIT ETF has a low expense ratio of 0.07%, making it one of the most cost-effective REIT ETFs on the market.

    These three REIT ETFs offer a mix of diversified exposure to the real estate sector, low expense ratios, and a focus on income-producing properties. As always, it’s important to do your own research and consider your own investment goals and risk tolerance before making an investment decision.

  • Investing in Dividend Stocks for Passive Income: 7 Tips for Building Steady Cash Flow

    Investing in Dividend Stocks for Passive Income: 7 Tips for Building Steady Cash Flow

    Investing in dividend stocks can be an effective strategy for generating passive income. These stocks represent shares of companies that distribute a portion of their profits to shareholders in the form of regular dividends. By strategically investing in dividend stocks, you can have the opportunity to benefit from both the potential of capital appreciation, along with a steady stream of income from your investment (typically on a quarterly basis). Today, we will delve into the key considerations and steps involved in investing in dividend stocks to build a reliable source of passive income. Here are 7 things you should consider when investing in dividend stocks:

    1. Assessing Dividend Yield: When evaluating dividend stocks, it’s essential to consider the dividend yield. This metric is calculated by dividing the annual dividend payment by the stock price. A higher dividend yield indicates a greater starting income potential, but it is by no means an indication of the measure of success of that company. In other words, the dividend yield or “starting yield” is definitely not the only factor to consider when investing in a company, and it is crucial to evaluate other factors in your fundamental analysis, which can include the company’s financial health and sustainability of the dividend.
    2. Analyzing Dividend History and Growth: Some companies, such as Dividend Aristocrats (25 years+ straight of consecutive dividend growth), are companies that have a consistent track record of paying dividends and increasing them over time. Such companies demonstrate their commitment to rewarding shareholders and can provide a reliable and growing income stream for your portfolio. Reviewing historical data, along with researching dividend growth rates can provide valuable insights into the company’s stability and commitment to distributing profits.
    3. Evaluating Company Financials: Before investing in dividend stocks, it is essential to assess the financial health (insert link) and stability of the underlying company. Examine factors such as balance sheet strength, cash flow generation, and sustainable dividend payout ratios. A financially sound company is more likely to continue paying dividends, even during challenging economic times.
    4. Diversifying Across Sectors and Industries: Diversification is a fundamental principle of investing. Spreading your investments across various individual stocks, funds, dependent upon your risk tolerance and investing objectives will help you to mitigate risks associated with specific market fluctuations or sector-specific challenges. By diversifying your dividend portfolio, you can maintain a steady income stream even during economic downturns. One way to diversify would be to invest in dividend ETFs or mutual funds, which automatically spread out your risks between many different companies.
    5. Consider Dividend Reinvestment: Dividend reinvestment plans (DRIPs) allow you to reinvest your dividend income by purchasing additional shares in the company. This strategy harnesses the power of compounding, as your investment grows over time, potentially leading to increased future dividend payouts. DRIPs offer a convenient and automatic way to reinvest dividends and accelerate the growth of your passive income.
    6. Tax Implications of Dividends: It is important to be aware of the tax implications associated with dividend income, as they vary depending on your specific jurisdiction and personal circumstances. Understanding the tax rules and regulations will enable you to optimize your investment strategy, and potentially minimize tax obligations. We recommend consulting with a tax professional to ensure you make informed decisions regarding your dividend investments.
    7. Regular Portfolio Management: Maintaining an effective dividend stock portfolio requires regular review and rebalancing. Keep track of market conditions and company fundamentals, and adjust your holdings accordingly. This proactive approach will help ensure a healthy balance between income generation and risk management over the long term.

    Conclusion

    Investing in dividend stocks offers the potential for passive income by capitalizing on both capital appreciation and regular dividend payments. By considering many different factors including dividend history and growth, company financials, diversification, dividend reinvestment, and possible tax implications, you can build a robust portfolio that generates steady cash flow. However, it is crucial to conduct thorough research, exercise due diligence, and adopt a long-term investment perspective to maximize the benefits of investing in dividend stocks for passive income.

  • 25 Dividend Stocks that Have Increased their Dividend Payout for 25 Years Straight

    25 Dividend Stocks that Have Increased their Dividend Payout for 25 Years Straight

    Some companies, also known as Dividend Aristocrats, have a history of consistently paying out and raising their dividends every single year for 25 years or more. For example, if a company 25 years ago was paying a dividend of $1 per share, that means each year they have increased that dividend, rather it be a small or large amount. Now, that company may be paying dividends much higher than that original $1 per share amount, due to the consistently increasing dividends.

    With that being said, here is a list of 25 companies that have increased their dividend payout for 25 years in a row or more, demonstrating a strong track record of consistent dividend growth:

    1. 3M Company (MMM) – A diversified technology company that operates in various sectors, including healthcare, industrial, and consumer markets.
    2. Abbott Laboratories (ABT) – A global healthcare company specializing in the development, manufacturing, and marketing of pharmaceuticals, diagnostics, and medical devices.
    3. Aflac Incorporated (AFL) – An insurance company that provides supplemental health and life insurance products in the United States and Japan.
    4. Archer-Daniels-Midland Company (ADM) – A global food processing and commodities trading corporation that specializes in agricultural commodities and products.
    5. Automatic Data Processing, Inc. (ADP) – A leading provider of human resources management software and services, offering solutions for payroll, benefits administration, and talent management.
    6. Chevron Corporation (CVX) – An integrated energy company engaged in exploration, production, refining, and marketing of oil and gas products worldwide.
    7. The Clorox Company (CLX) – A consumer goods company known for its wide range of household and professional cleaning products, as well as personal care and lifestyle products.
    8. The Coca-Cola Company (KO) – A leading beverage company with a diverse portfolio of brands, including Coca-Cola, Sprite, and Fanta.
    9. Colgate-Palmolive Company (CL) – A global consumer products company known for its oral care, personal care, home care, and pet nutrition products.
    10. Consolidated Edison, Inc. (ED) – A utility holding company providing electric, gas, and steam services to customers in New York City and surrounding areas.
    11. Dover Corporation (DOV) – A diversified industrial manufacturing company that produces a wide range of specialized equipment and components.
    12. Emerson Electric Co. (EMR) – A global technology and engineering company that offers solutions in automation, commercial and residential solutions, and process control.
    13. Exxon Mobil Corporation (XOM) – One of the largest publicly traded international oil and gas companies, involved in various aspects of energy exploration, production, refining, and marketing.
    14. Genuine Parts Company (GPC) – A distributor of automotive replacement parts, industrial replacement parts, office products, and electrical materials.
    15. Johnson & Johnson (JNJ) – A multinational healthcare company known for its consumer health products, pharmaceuticals, and medical devices.
    16. Kimberly-Clark Corporation (KMB) – A global leader in the production of personal care products, including diapers, tissue, and feminine care products.
    17. The Coca-Cola Company (KO) – A leading beverage company with a diverse portfolio of brands, including Coca-Cola, Sprite, and Fanta.
    18. McDonald’s Corporation (MCD) – A global fast-food chain renowned for its hamburgers, french fries, and other fast-food items.
    19. Medtronic plc (MDT) – A medical technology company that designs, develops, and manufactures medical devices and therapies to improve patient outcomes.
    20. Procter & Gamble Company (PG) – A consumer goods company that manufactures and distributes a wide range of products, including household essentials, personal care items, and pet food.
    21. Sherwin-Williams Company (SHW) – A global leader in the production and distribution of paints, coatings, and related products.
    22. Stanley Black & Decker, Inc. (SWK) – A diversified global provider of tools, industrial equipment, and security solutions for various industries.
    23. Target Corporation (TGT) – A retail company offering a wide range of merchandise, including clothing, household essentials, electronics, and groceries.
    24. United Technologies Corporation (UTX) – A multinational conglomerate that operates in various sectors, including aerospace, building technologies, and defense.
    25. Walgreens Boots Alliance, Inc. (WBA) – A multinational retail pharmacy chain and healthcare company providing a wide range of products and services.
  • 10 Dividend Stocks that Have Increased Their Dividend Payout for 10 Years Straight

    10 Dividend Stocks that Have Increased Their Dividend Payout for 10 Years Straight

    1. Johnson & Johnson (JNJ) – A multinational healthcare company known for its consumer health products, pharmaceuticals, and medical devices.
    2. Procter & Gamble (PG) – A consumer goods company that manufactures and distributes a wide range of products, including household essentials, personal care items, and pet food.
    3. Coca-Cola (KO) – A beverage company known for its iconic carbonated soft drinks and other non-alcoholic beverages.
    4. PepsiCo (PEP) – A multinational food and beverage company that produces a variety of snacks, beverages, and convenience foods.
    5. 3M (MMM) – A diversified technology company that operates in various sectors, including healthcare, industrial, and consumer markets.
    6. McDonald’s (MCD) – A global fast-food chain renowned for its hamburgers, french fries, and other fast-food items.
    7. Target Corporation (TGT) – A retail company offering a wide range of merchandise, including clothing, household essentials, electronics, and groceries.
    8. Visa Inc. (V) – A multinational financial services corporation that facilitates electronic funds transfers and payment transactions globally.
    9. Johnson Controls International plc (JCI) – A multinational conglomerate specializing in building automation, HVAC systems, and energy storage solutions.
    10. The Coca-Cola Company (KO) – A leading beverage company with a diverse portfolio of brands, including Coca-Cola, Sprite, and Fanta.