This Hugely Popular Dividend ETF Is About More Than Dividends
Very often, dividend investors focus on dividend yield as a key selection metric. To some extent that makes sense, but it can miss important company-specific issues that might lead you to avoid a stock. That's exactly why dividend investors looking for an exchange-traded fund (ETF) need to examine Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). Here's what you need to know.
Stocks with high yields often have high yields for a reason. Either the sectors from which they hail are known for high yields, like utilities and real estate investment trusts (REITs), or the companies have temporarily fallen on hard times, which is normal in cyclical industries like energy or can be company-specific. The point is that buying stocks based solely on yield will often result in a portfolio that's concentrated in a small number of sectors and often will leave you with at least a few troubled stocks.
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Source Fool.com
