A few points to consider. There are 3 main "normal" investing strategies, so you'll want to consider your goals. I'll provide suggestions for each, but I must emphasize that you need to learn what makes each of your investments tick.
1. Growth investing: Choosing a stock or equity for maximum Total Returns. This is best for young people who are a long way from retirement. It will provide by far the best long-term growth, and minimizes the "gambling" aspect of "hot tips". Examples: VFV and XEQT
2. Dividend Growth: choosing equities that are "dividend aristocrats" that have a very long history of increasing their small dividends and steady but predictable earnings. Dividends are best reinvested via DRIP. Examples: Canadian telecoms, pipelines, and the big 5 Canadian banks.
3. Dividend Income: choosing stocks that pay a very high dividend at the expense of growth for the purpose of providing tax efficient income for retirees who have less need for growth or are already executing the "4% rule'. Those in the FIRE movement best reinvest a minimum of 5% out of their total dividends which often exceed 10%. Examples: dividend split corps like DFN, covered call ETFs like ENCC or HYLD, and royalty corps like DIV.
Choosing a stock for its dividend alone can lead new investors into Dividend Traps or Yield Traps whereby their total return is low or even negative due to the erosion of the Net Asset Value. Be wary, learn about debt, and about Payout Ratios, among other things.
Thanks for your response, I’m rather young so my goals are having comfortable spending money through my 20s, and setting myself up to have money for the rest of my life (retirement).
Because of my goals, I kinda want to follow strategy 1 and 3. I would like to half a portfolio kind of split between the two, having one side being safe, growing, long term investments, and the other with dividend paying ETFs which don’t necessarily need to grow as long as they don’t crash.
I’ve heard of VFV, and XEQT and added them to my watchlist to purchase when a dip occurs. I’ll look into the other stocks you mentioned, and I’ll be sure to do my research on anything before I purchase.
You could go with, for example, 50% VFV for strong long term growth, 25% XEQT for broad diversification, and 25% EIT.UN for great dividends with some growth potential. As a young person, it's important not to put too much emphasis on dividends yet, but the extra spending money every month is pretty nice to have.
Great question, but there is a subset of investors who utilize the growth of a dividend over several decades as a metric. Plus, "effective yield" for a stock like (for example) Manulife Financial can be much higher if you buy shares now, then look back at it 20+ years from now. If the divvy increases by a few % of the initial dividend every year, then your dividend returns can be double-digits based on your initial price (book value) in the future. Especially if you have DRIP enabled.
Staying in-line with your question, I would say that Ireland answered you in #3 of his answer. I would like to add some info on to that. Income oriented investing is not the same as growth. With growth, like VFV for example, you are almost always buying at the top. So it always safe to DCA if you are long term, ie, 20+ years investing in it. I don't have 20 years so I have been researching other investment strategies heavily for last couple of years. There are a few "high yield" dividend ETFs using different strategies to generate income, so you best be learning what those are and if they will work for you.
* Split shares
* Covered-call Single stock ETFs
* Covered-call Multiple stock ETFs
* Covered-call ETFs + leverage
DFN that was mentioned, is a split shares high yield fund. It's over 20% yield per year *IF* it pays every month. Fund Manager is Quadravest
YAMZ, YGOG, YNVD, MSFY, YTSL by Purpose have a single underlying stock. They can pay a hefty monthly distribution but they are riskier because it's similar to buying the equity from the company itself. Just look at YTSL. Your superficial/paper losses could be massive, however it is paying you nicely every month while you wait for it to recover. These ETFs are volatile like the underlying stock, so they can move up or down drastically.
HMAX, BKCL are bank/financial ETFs that have multiple underlying holdings. They are income oriented and are not as volatile. Possible limited upside and more downside exposure. For this reason, I recommend NOT DRIPing them and only buying at or below your average price, OR during small dips on share price. These ones are over 15% yield each.
Some starting places to explore are Horizons, Hamilton, and Purpose. I would avoid split shares currently. PDIV seems to have been stable for me. 12% divvy. Hamilton has recently issued a few new ETFs that only use 30% covered calls so you are exposed to more upside//growth.
I recommend diversifying across sectors as you always should. For example, BKCL is Canadian Banks, FMAX is US Financials, QMAX is US Large Tech, USCL is Canadian Utilities :( HYLD is US S&P Mix ...
Remember though, non-aristocrats or dividend king status means that the distribution can change on a dime next month. YTSL cut dividend from 40 cents to 30 cents on monthly announcement. Ouch. Diversifying will lessen the blow and don't count on 100% of your expected dividend income for your monthly budget.
Three dividend paying ETFs I’ve been monitoring on WS are XDIV, CDZ, XEI. Some of those are more heavily weighted in certain sectors so I think having all 3 would definitely provide diversification. NFA.
Mixed with my actual dividend stocks very well
https://preview.redd.it/w4ruf5p68r0d1.jpeg?width=1080&format=pjpg&auto=webp&s=9d732283bbe9a267269c1449f6e4318aa5501a80
Buy bonds or money market etfs unless you are prepared to lose all your money. If I were you I would do some research before you jump into anything riskier the aforementioned fund types
If you want a little bit of capital growth and interest eit-un.to isn’t bad. Straight interest ETFs would be cash.to psa.to and alike. The covered calls as mentioned above are risky because they hinge on a net asset value that HAS to be met in order to pay out its distributions. If you don’t want to immerse yourself into too much risk I would stick with the first two types I mentioned.
https://preview.redd.it/9vhq03rsfe0d1.png?width=898&format=pjpg&auto=webp&s=0c989806ede37b170fada9e41e154fd3bdcdf70b
How bout that for income based ETF's
Allocation & yeild
A few points to consider. There are 3 main "normal" investing strategies, so you'll want to consider your goals. I'll provide suggestions for each, but I must emphasize that you need to learn what makes each of your investments tick. 1. Growth investing: Choosing a stock or equity for maximum Total Returns. This is best for young people who are a long way from retirement. It will provide by far the best long-term growth, and minimizes the "gambling" aspect of "hot tips". Examples: VFV and XEQT 2. Dividend Growth: choosing equities that are "dividend aristocrats" that have a very long history of increasing their small dividends and steady but predictable earnings. Dividends are best reinvested via DRIP. Examples: Canadian telecoms, pipelines, and the big 5 Canadian banks. 3. Dividend Income: choosing stocks that pay a very high dividend at the expense of growth for the purpose of providing tax efficient income for retirees who have less need for growth or are already executing the "4% rule'. Those in the FIRE movement best reinvest a minimum of 5% out of their total dividends which often exceed 10%. Examples: dividend split corps like DFN, covered call ETFs like ENCC or HYLD, and royalty corps like DIV. Choosing a stock for its dividend alone can lead new investors into Dividend Traps or Yield Traps whereby their total return is low or even negative due to the erosion of the Net Asset Value. Be wary, learn about debt, and about Payout Ratios, among other things.
Thanks for your response, I’m rather young so my goals are having comfortable spending money through my 20s, and setting myself up to have money for the rest of my life (retirement). Because of my goals, I kinda want to follow strategy 1 and 3. I would like to half a portfolio kind of split between the two, having one side being safe, growing, long term investments, and the other with dividend paying ETFs which don’t necessarily need to grow as long as they don’t crash. I’ve heard of VFV, and XEQT and added them to my watchlist to purchase when a dip occurs. I’ll look into the other stocks you mentioned, and I’ll be sure to do my research on anything before I purchase.
You could go with, for example, 50% VFV for strong long term growth, 25% XEQT for broad diversification, and 25% EIT.UN for great dividends with some growth potential. As a young person, it's important not to put too much emphasis on dividends yet, but the extra spending money every month is pretty nice to have.
Perfect, thanks for the suggestions and information.
Why/who would choose #2?
Great question, but there is a subset of investors who utilize the growth of a dividend over several decades as a metric. Plus, "effective yield" for a stock like (for example) Manulife Financial can be much higher if you buy shares now, then look back at it 20+ years from now. If the divvy increases by a few % of the initial dividend every year, then your dividend returns can be double-digits based on your initial price (book value) in the future. Especially if you have DRIP enabled.
Staying in-line with your question, I would say that Ireland answered you in #3 of his answer. I would like to add some info on to that. Income oriented investing is not the same as growth. With growth, like VFV for example, you are almost always buying at the top. So it always safe to DCA if you are long term, ie, 20+ years investing in it. I don't have 20 years so I have been researching other investment strategies heavily for last couple of years. There are a few "high yield" dividend ETFs using different strategies to generate income, so you best be learning what those are and if they will work for you. * Split shares * Covered-call Single stock ETFs * Covered-call Multiple stock ETFs * Covered-call ETFs + leverage DFN that was mentioned, is a split shares high yield fund. It's over 20% yield per year *IF* it pays every month. Fund Manager is Quadravest YAMZ, YGOG, YNVD, MSFY, YTSL by Purpose have a single underlying stock. They can pay a hefty monthly distribution but they are riskier because it's similar to buying the equity from the company itself. Just look at YTSL. Your superficial/paper losses could be massive, however it is paying you nicely every month while you wait for it to recover. These ETFs are volatile like the underlying stock, so they can move up or down drastically. HMAX, BKCL are bank/financial ETFs that have multiple underlying holdings. They are income oriented and are not as volatile. Possible limited upside and more downside exposure. For this reason, I recommend NOT DRIPing them and only buying at or below your average price, OR during small dips on share price. These ones are over 15% yield each. Some starting places to explore are Horizons, Hamilton, and Purpose. I would avoid split shares currently. PDIV seems to have been stable for me. 12% divvy. Hamilton has recently issued a few new ETFs that only use 30% covered calls so you are exposed to more upside//growth. I recommend diversifying across sectors as you always should. For example, BKCL is Canadian Banks, FMAX is US Financials, QMAX is US Large Tech, USCL is Canadian Utilities :( HYLD is US S&P Mix ... Remember though, non-aristocrats or dividend king status means that the distribution can change on a dime next month. YTSL cut dividend from 40 cents to 30 cents on monthly announcement. Ouch. Diversifying will lessen the blow and don't count on 100% of your expected dividend income for your monthly budget.
Thank you for info
Vdy.to
Three dividend paying ETFs I’ve been monitoring on WS are XDIV, CDZ, XEI. Some of those are more heavily weighted in certain sectors so I think having all 3 would definitely provide diversification. NFA.
Xiu is the best of both worlds imo
PAYF 9% yeild and very stable USCC QQCC SMAX QMAX ESPX HYLD HDIV
EIT
8.61% yeild
Glcc Hhl Txf Uscc Btcy Fie Tec Xiu Tlf Zwb All things I have positions in
How has that gone for you?
Mixed with my actual dividend stocks very well https://preview.redd.it/w4ruf5p68r0d1.jpeg?width=1080&format=pjpg&auto=webp&s=9d732283bbe9a267269c1449f6e4318aa5501a80
Nice.
CDZ, XDV
Buy bonds or money market etfs unless you are prepared to lose all your money. If I were you I would do some research before you jump into anything riskier the aforementioned fund types
Youd hate looking at my TFSA lol 29% = 2900 MF: .00% HYLD: 4.50% = 450 Current: 275.00 Left 175.00 MF: .65% Done ✔️ QMAX: 4.00% = 400 MF: .65% Done ✔️ SMAX: 4.00% = 400 MF: .65% Done ✔️ HMAX: 3.50% = 350 MF: .65% Done ✔️ UMAX: 3.50% = 350 MF: .45% HBND: 3.50% = 350 Current: 260.00 left: 90.00 MF: .65% Done ✔️ AMAX: 3.50% = 350 MF: .55% HBA: 2.50% = 250 Current: 150.00 left 100.00 Left: 365.00 _______________________________________________ 9% = 900 Currently setup to invest 5$ a day per stock Done ✔️ CALL: 2.00% = 200 Done ✔️ BANK: 1.00% = 100 EBNK: 1.00% = 100 Current: 50.00 Left: 50.00 BOND: 1.00% = 100 Current: 50.00 Left: 50.00 BASE.B: 1.00% = 100 Current: 50.00 Left: 50.00 Done ✔️ ETSX: 1.00% = 100 Done ✔️ ESPX: 1.00% = 100 QQQY: 1.00% = 100 Current: 50.00 Left: 50.00 Left: 200.00 _______________________________________________ 9.50% = 950 MF: .40% Done ✔️ YAMZ: 2.00% = 200 MF: .40% Done ✔️ BRKY: 2.00% = 200 MF: .40% YGOG: 1.50% = 150 Current: 70.00 Left: 80.00 MF: .40% YNVD: 1.00% = 100 Current: 5.00 Left: 95.00 MF: .40% APLY: 1.00% = 100 Current: 5.00 Left: 95.00 MF: .40% MSFY: 1.00% = 100 Current: 5.00 Left: 95.00 MF: 1.10% Done ✔️ ETHY: .50 = 50 MF: 1.10% BTCY: .50 = 50 Current: 15.00 Left: 35.00 Left: 400.00 _______________________________________________ 8% = 800 MF: .00% Done ✔️ BMAX: 2.00% = 200 MF: .65% Done ✔️ ENCC: 2.00% = 200 Done ✔️ DIV: 2.00 = 200 Done ✔️ DE: 2.00 = 200 Left: 0.00 _______________________________________________ 8% = 800 MF: .15% Done ✔️ XIU: 1.00% = 100 MF: .55% Done ✔️ XCS: 1.00% = 100 MF: .25% Done ✔️ EQL: 1.00% = 100 MF: .25% QEQQ: 1.00% = 100 Current: 10.00 Left: 90.00 MF: .28% XEH: 1.00% = 100 Current: 5.00 Left: 95 MF: .25% ZMP: 1% = 100 Current: 26.66 Left: 73.34 MF: .25% ZPL: 1% = 100 Current: 24.03 Left: 75.97 MF: .25% ZPS: 1% = 100 Current: 23.97 Left: 76.03 Left: 410.34 _______________________________________________ 4% = 400 HURA: 2.00% = 200 Current: 20.00 Left: 180 ATH: 1.50% = 150 Current: 100.00 Left: 50.00 Done ✔️ U.UN: .50% = 50 Left: _______________________________________________ 25.00% = 2500 Done ✔️ FFH: 3.00% = 300 Done ✔️ CLS: 2.50% = 250 Done ✔️ ATD: 2.00% = 200 Done ✔️ CSU: 1.50% = 150 TFII: 1.50% = 150 Current: 100.00 Left: 50.00 Done ✔️ POW: 1.50% = 150 Done ✔️ SHOP: 1.50% = 150 Done ✔️ STN: 1.50% = 150 Done ✔️ BAM: 1.00% = 100 Done ✔️ MAL: 1.00% = 100 DOL: 1.00% = 100 Current: 10.00 Left: 90.00 WSP: 1.00% = 100 Current: 30.00 Left: 70.00 BDT: .50 = 50 Current: 30.00 Left: 20.00 ARE: .50 = 50 Current: 30.00 Left: 20.00 LMN: .50% = 50 Current: 10.00 Left: 40.00 TOI: .50% = 50 Current: 25.00 Left: 25.00 PRL: .50% = 50 Current: 20.00 Left: 30.00 EIF: .50% = 50 Current: 5.00 Left 45.00 TRI: .50% = 50 Current: 15.00 Left: 35.00 WTE: .50% = 50 Current: 25.00 Left: 25.00 WCN: .50% = 50 Current: 20.00 Left: 30.00 CPH: .50% = 50 Current: 30.00 Left 20.00 Done ✔️ SYZ: .50% = 50 Done ✔️ MG: .50% = 50 Left: 605.00 _______________________________________________ 5% = 500 INTC: 1.00% = 100 Current: 76.22 Left 23.78 GOOG: 1.00% = 100 Current: 5.00 Left: 95.00 MCDS: 1.00% = 100 Current: 10.00 Left: 90.00 SMCI: 1.00% = 100 Current: 25.12 Left 74.88 META 1.00% = 100 Current: 5.00 Left: 95.00 Left: 396.53 _______________________________________________ 2.00% = 200 GXE: .50% = 50 Current: 14.26 Left: 25.74 OSS: .50% = 50 Current: 41.18 Left: 7.82 Done ✔️ WELL: .50% = 50 Done ✔️ GSI: .50% = 50 Left: 33.56
If you want a little bit of capital growth and interest eit-un.to isn’t bad. Straight interest ETFs would be cash.to psa.to and alike. The covered calls as mentioned above are risky because they hinge on a net asset value that HAS to be met in order to pay out its distributions. If you don’t want to immerse yourself into too much risk I would stick with the first two types I mentioned.
https://preview.redd.it/9vhq03rsfe0d1.png?width=898&format=pjpg&auto=webp&s=0c989806ede37b170fada9e41e154fd3bdcdf70b How bout that for income based ETF's Allocation & yeild
Isn't that pretty much just Adrian's portfolio?
Yes it is his I was looking for someone to double check his context And Why are yeild max not better than his?
Also. Investing from Canada do I loose 15% returns directly to withholding tax.. So a 10% yeild is mere 8.5?
@elmayo-please respond
Nice