Posted By 
High-dividend-yield ETFs can be great additions to a portfolio: here are tips that will help you find the best ones
Here’s a look at high dividend yield ETFs and our advice on finding the best ones for your diversified portfolio.
4 ways to invest in profitable high-dividend-yield ETFs
- Look for ETFs that hold companies with long-term success and a long history of paying dividends. These companies are the most likely to keep paying and increasing their dividends.
- The current financial health of each company in the ETF. If a company is doing well, has done so consistently, and shows signs of growth, these factors are indicative of stocks that will keep paying a dividend.
- How does the company manage its relationships with investors? If there is a favourable relationship, and the company fits the other qualifications listed above, it may be a good dividend-paying stock to invest in.
- Note the competition. Look for ETFs with companies with a strong hold on a growing market and a unique product or service that cuts its competition.
High-dividend-yield stocks are a key part of a successful portfolio but at the same time they can give investors a false sense of security. That’s because some investors tend to think that all high-dividend-yield stocks are safe.
When a high dividend yield means danger
A high dividend yield may be a danger sign. It may mean investors are selling and pushing the price down. A falling share price makes a stock’s yield goes up (because you still use the latest dividend payment as the numerator to calculate yield — but the denominator, the price, has dropped). But when a stock does cut or halt its dividend, its yield collapses.
The best ETF investments practice “passive” fund management
