A group of friends were talking about money and investing and the general feeling is always invest your money in ETF's and Mutual Funds that index high yield stocks. Here is the ETF's that were recommended:
DVY
FDL
HDV
PEY
SDY
VYM
If you bought an equal amount of all these ETF's your annual dividend yield would be about 3.5%, vs 1.65% for a total stock market ETF like VTI or ITOT.
I tried to tell them that over time these high dividend ETF's do not do as well in total return than a total stock market index fund. And everytime they paid the dividend the price value of the ETF went down an amount equal to the amount of the dividend. So the payment of the dividend is a wash if you reinvest it. My friends did not believe me and dismissed my comments out of hand.
Who is right about these dividend ETF's, my friends or me?
Submitted June 18, 2018 at 10:16AM by KillingTime56 https://ift.tt/2MCTzQP
