There a range of different roads for income oriented investors to take to reach their goals. Picking and choosing select companies with strong fundamentals and a risk reward profile which is well suited to the goals of a portfolio over time is one excellent strategy. Investing passively, through and exchange traded fund (ETF) is another excellent way to accomplish the same thing.
In today's ETF environment, finding such funds with rock bottom management expense ratios is not difficult. I've found that companies like Vanguard are ahead of the curve with respect to cutting the annual fee charged to clients to very close to zero. For passive investors looking for long term dividend income, choosing a dividend ETF with near zero fees is important, to maximize yield over time.
One excellent dividend ETF product offered by Vanguard is the Vanguard Dividend Appreciation ETF (VIG). This ETF has outperformed many of its peers due to an investment strategy I wholeheartedly endorse and believe in, over the long term.
The strategy is quite simple: pick select companies that have raised their dividend over the past 10 years, filtering out those firms that have flip flopped, cut or eliminated their dividend, and/or held their distribution flat for some portion of time.
Seeking companies that have consistently increased their distributions to shareholders provides a low risk avenue for income investors to achieve higher levels of income over time, making this one of my top ETF picks for dividend investors.
Invest wisely, my friends.
