Which is better? I understand one may be better tailored depending on your personal needs.
Im asking this question on behalf of the general public which would be long term investors.
Since im canadian we will assume all canadian laws and regulations apply (tax etc)
Would it be better to say own an ETF like ZSP.TO providing a yield YTD of 13.75% with a 0.08 MER. or to own blue chip high dividend yielding companies like TD, BNS, CM, RY, BMO, FTS, BCE, TRP, SRU.UN with money in each sector giving finance and real estate the greatest capitals...followed by communication/utilities/energy (arranged how i like my risk to be). Just spitting out numbers here these companies are still way undervalued so there are capital gains to be made here. However on an annual basis you can look to make on average 6-7% return (when these stocks are not on discount like now) which includes both dividend and capital gains. Less tax you may have a 5% gain.
Now you may say that it is a no brainer you would pick a 12% return after tax (assuming you sell) but the difference here is that the S&P has a much higher PE ratio than the TSX. I dont want to market to enter a correction with all my money in one ETF suffering and providing no income. I see having the high dividend yielding stocks would provide more safety than simply tracking the S&P 500. Atleast if prices crashed, it would provide with a dividend payment till things got back on track.
If it helps to answer my question im young (22) and have over 6 figs invested into individually picked stocks currently up 19.75%. For only starting to learn all of this stuff in march i think im doing pretty good! Im learning the more you touch your investments the worse i perform lol. Staying away from short term volatility playing is the best option for most traders.
I want to know if i want to make tons of money (obviously) is it best to go for ETFs or dividend stocks? This invested money will be put away for LONG. I plan on adding 6K to my TFSA, 6K to my RRSP and 12K to my margin account per year.
Thanks. GLTA.
Submitted January 01, 2021 at 07:51PM by HomosapianDaGreekGod https://ift.tt/2X3O2te
