As the S&P 500 dividend yield plummets to 1.18%, its lowest since 2001, dividend-focused investors find themselves in a challenging environment, highlighted by the dominance of low-yielding tech stocks.
Coca-Cola, boasting a 3.1% yield, draws interest for income-focused investors, but its past five-year annualized total return of just 6.49% shows limited capital appreciation.
The First Trust NASDAQ Technology Dividend Fund (TDIV) outperforms Coca-Cola significantly with a total annualized return of 16.15%, showcasing the potential benefits of focusing on dividend ETFs.
Understanding that total return includes both dividends and capital appreciation is crucial for investors aiming for true wealth creation; steady dividends can indeed smooth the path.
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