"One of the most important things to remember is that if you want to build up wealth, it's different than retirement income, and if you're on the former side, you want to start accumulating money now. If you're trying to live off your portfolio now, volatility can become highly personal, as a 20% drop in the market over time isn't a buying opportunity, it's actually the money you need for rent and living."
"It's for this reason that income ETFs matter for the long haul, as they aren't focused on chasing the maximum yield or the next hot sector like AI. Instead, there is a desire to build a foundation that won't make you nervous when interest rates shift, sectors underperform, or markets correct. The right income ETFs are going to do exactly this, and if you choose carefully, you can look to accumulate more wealth over a 10-year period and not just month to month."
"It should be said that income ETFs have greatly evolved over the past decade, and the old dividend ETFs just held dividend stocks and had you hoping for the best. This new generation of ETFs is designed to last for a decade or more and is built to be sustainable, globally diversified, and bring together different income sources to help reduce overconcentration."
Building wealth requires accumulating money now, which differs from generating retirement income focused on spending a portfolio. Volatility is more hazardous for those living off a portfolio, because market drops remove funds needed for rent and living. Income ETFs matter for the long haul because they prioritize sustainable income and stability over chasing maximum yield or hot sectors. The right income ETFs aim to survive bear markets, adapt to changing interest rates, and deliver consistent income through full market cycles. New-generation income ETFs emphasize quality, global diversification, multiple income sources, and reduced concentration risk versus high-yield, concentrated funds.
Read at 24/7 Wall St.
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