In a post on April 21, “DVY – The iShares Dow Jones Select Dividend Index” (another of my eye-catching post titles), I offered that this ETF provided a nice dividend, 4.29% when I posted, a bit less after the recent rally. I suggested that for those who are investing for the long term, this ETF might provide a good selection. The dividend is taxed at favorable rates, 0% if you are in the 15% bracket or lower. Below is a chart comparing DVY to the S&P 500 index since I made the recommendation. *
I acknowledge that there was a time, around July 15th when this appeared to be a bad idea, with DVY lagging the S&P by more than 10%. Of course, in hindsight that was the time to buy more, as DVY recovered and since my April post, the DVY is up 2.5% vs the S&P, down nearly 10%.
I’ll repeat, this ETF is a mix of stocks with the risk the market brings, but the long term, a five year period or longer should reward patience.
Joe
*My standard disclaimers apply.