Dividend Aristocrats

[lordmetroid]

Is Dividend Aristocrats a Variable Portfolio Asset or can it be considered an index fund of sort?

What Dividend Aristocrats ETF would you recommend?

[MachineGhost]

Is Dividend Aristocrats a Variable Portfolio Asset or can it be considered an index fund of sort?

What Dividend Aristocrats ETF would you recommend?

Loaded question.  All of the dividend ETF's suck for a variety of reasons, namely fees, low yields, no history/guarantee of increasing dividend payments.  But they suck just enough to probably be considered a run of the mill index fund.  Doing dividend growth investing properly would be best done in a VP with individual stocks you can analyze and control.  There's no free lunch in this area, unfortunately.

[dualstow]

I suppose anything could be a VP asset- money you are willing to lose. I have individual stocks left over from pre-pp days, and most of them raise dividends annually. Cash is not reinvested into these stocks but instead helps feed the pp's cash portion and helps fund new purchases of gold, etc.

[WildAboutHarry]

A portfolio of 30-50 Dividend Aristocrats pretty much acts like the S&P 500, and has a greater dividend yield.  MG is right about the Dividend ETFs.  Relatively high fees and very uneven performance relative to dividend payments and increases are the norm for most.  Some of the Vanguard dividend ETFs are OK, fee-wise.

Managing a portfolio of individual Dividend Aristocrats is not as difficult as it sounds, but is certainly not as easy as buying a fund.

Remember, a "true" HBPP is physical gold, an S&P 500/Total Market Fund, and individual Treasury Bonds and Notes.  I doubt that there are many on this board (myself included) that run a "true" HBPP.  I will say that most individual investors portfolios resemble the HBPP to some degree.  In some cases that degree approaches zero.

[sapperleader]

I would agree with MG and wild about Harry that there are no great Dividend ETF's and that a portfolio of 30-50 Dividend Aristocrats can act like a mini index.  My wife and I do dividend investing in our variable portfolio and really like it.  In no way does it substitute for owning a total stock index as part of PP.  My thoughts are if you want to tinker with your portfolio, pick a allocation for variable and stick with it and let the PP do its thing. Variable investing does not have to speculate, but does need to have identified goals, follow whatever rules you write down before you start, and be accepting of greater volatility. 

I enjoy stock picking of the Aristocrats.  It is enjoyable picking out businesses, reading their financial documents, and reviewing the financial ratios.  My wife and I view it as buying parts of a business and plan on holding the stocks our entire life.  We definitely use the model of if the stock market closed for the next 10 years, are we ok owning this company, and if this company dropped 50% would we want to buy more of it(rather than panic selling).  I spend many hours each month reading the data, and spend a hour or two discussing our purchase options with my wife where we then decide what we are purchasing next.  If that doesn't sound fun, stick with indexes, they take way less time