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Join the Dividend Aristocrats Rally: Why You Should Stick with VIG for Fresh Highs



Active mutual funds continue to shun dividend-paying stocks, at least according to FactSet stock ownership data, reported by BofA earlier this week. The relative weight of long-only mutual funds to the high-dividend yield factor is near 50%, near its average since late 2016. Will

Join the Dividend​ Aristocrats ‍Rally: Why You Should Stick with VIG for‍ Fresh Highs

If you’re‌ an investor looking for consistent and reliable income, you’re probably familiar with‍ the ‍term “Dividend Aristocrats”. These are companies ⁢that have⁣ a long track record ‍of increasing their ⁢dividends year after year. In fact, they⁢ are such strong dividend payers that they have been ​able to weather⁤ even the toughest ⁤economic downturns. ⁤The Dividend Aristocrats have become a popular choice‍ for dividend investors, as they provide an opportunity for both stability and growth in their portfolio.

One of the most popular ways​ to invest in the Dividend Aristocrats is through the Vanguard ‌Dividend​ Appreciation ETF (VIG). This ETF tracks ‍the⁤ performance of the Dividend Aristocrats and has‌ become the go-to choice for many investors seeking⁣ to profit from the strength of these companies. Now, as the market continues to rally and the ​Dividend⁤ Aristocrats reach ‌new highs,⁤ sticking with VIG could provide⁣ even more potential growth for your portfolio. In this ⁤article, we’ll dive into ​the reasons why‍ you should join the Dividend Aristocrats rally and ‌stick with VIG to reach fresh highs.

What are the Dividend Aristocrats?

The Dividend Aristocrats ‌are a group of ‌65 S&P 500 companies that have consistently increased their dividends for at least 25 consecutive ⁣years. This is an impressive feat, as companies must have a strong financial standing and consistent⁤ earnings⁣ growth to be ⁣able to increase their dividends year after year. Some of the well-known names in⁢ this group include Coca-Cola, Johnson & Johnson, and Procter & Gamble, to name​ a few.

Why Should You Invest in the Dividend Aristocrats?

1. Consistent Income: One of the biggest draws for dividend investors is the reliable income they can provide. The Dividend Aristocrats, being some of the strongest dividend payers, offer investors a consistent stream of ⁣dividend payments.​ This is especially beneficial for those who rely on dividend‍ income ​for their living expenses or ⁤for a regular‌ stream of passive income.

2. Protection from Market⁢ Volatility: In times of market volatility, dividend paying stocks tend to hold up better compared to non-dividend paying stocks. This is because even if the market drops, investors can still receive dividends from their investments. As the Dividend Aristocrats have a long history​ of consistent dividend growth, they are able ⁢to provide a level of stability and protection to your portfolio during market downturns.

3. Potential for Growth: While the Dividend Aristocrats ⁣are known for their consistent‍ dividend payments, they also have‍ the potential for capital appreciation.⁤ As these companies have a strong financial standing and a ⁢proven track record of growth, they are likely to continue increasing their dividends over time. This makes ⁣them an⁣ attractive option‍ for ‍investors looking for both income‌ and growth⁣ potential.

Why⁢ VIG is the ​Best Option to Invest‌ in the Dividend Aristocrats?

Now that we’ve ‍established the ​benefits of investing⁣ in the ‍Dividend Aristocrats, let’s explore⁢ why⁢ VIG is the ⁢best‍ option to gain exposure to this group of companies.

1. Diversification: VIG provides investors with exposure‍ to⁢ a diverse range of Dividend Aristocrats across various⁢ sectors. This helps mitigate risk and ensures that ‌if one sector underperforms, the overall impact ​on the ⁣portfolio is⁢ minimized. This level of⁣ diversification is not easy to achieve when investing in individual stocks, ​making VIG a convenient and smart choice for investors.

2. Cost-Effective: Investing in individual stocks can ⁤be costly, as it involves transaction fees and potential risks associated with ​picking the right stocks. With VIG,‍ investors can gain exposure to⁣ the Dividend Aristocrats at ‌a much lower cost. The expense​ ratio for VIG is ​only 0.06%, which is significantly lower compared to actively managed mutual funds.

3. Strong Historical Performance: VIG has a ⁤strong track record of ⁤performance, reflecting the growth‌ of the Dividend Aristocrats ⁤over the years. According to Vanguard, VIG has had an average annual return of 11.71% since its inception in 2006, which is higher than the S&P 500’s ⁣average return ⁤of 9.41% during the same period.

4. Quarterly Dividend Payments: While most ETFs ‍typically pay⁣ dividends on a monthly ​or annual basis, VIG distributes dividends four times a year.​ This means investors can receive regular income throughout the year, providing a‍ steady stream of cash flow for their portfolio.

In Conclusion

The ​Dividend Aristocrats have proven to be a stable and profitable‍ investment option for dividend investors. With the current market rally​ and⁤ their‌ continued growth, sticking with a tried and tested option like VIG can provide investors ‍with fresh highs in their portfolio. As always, it’s ⁤important to do your ‍own research and‌ consult with a financial advisor before making any investment decisions. But by joining the Dividend Aristocrats rally and sticking with VIG, ​you could potentially ⁤reap the​ benefits of stability, growth, and consistent income for⁤ years to ⁣come.

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