Looking for consistent income in retirement beyond Social Security? Need more frequent payouts than the quarterly dividends that come from many stocks and exchange-traded funds (ETFs)? Most Vanguard ETFs pay quarterly dividends, but many retirees prefer monthly payouts. There are a few Vanguard ETFs that pay every 30 days vs. the more common 90 days. Let's take a look. Vanguard Total Bond Market ETF (BND) The Vanguard Total Bond Market ETF (BND) is a great option for retirees. The fund focuses on U.S. investment-grade bonds and buys U.S. Treasuries and mortgage-backed securities of all maturities (short, medium, and long). About half of its holdings are issued by the U.S. Treasury or agencies, with 20% going to government mortgage-backed bonds and 14.5% going to industrials. Less than 4% come from foreign issuers.
The JPMorgan Equity Premium Income ETF is managed by the highly experienced and professional managers at JPMorgan. It is one of the many monthly dividend ETFs with a juicy yield of 8.25%. It is an actively managed fund that employs a two-step strategy. It invests in stocks using a bottom-up fundamental research process and ranks stocks based on volatility, risk/return profile, and value. The fund manager identifies the top stocks and invests in them. For the second part of the strategy, it uses an options overlay to sell out-of-money call options on the S&P 500 index. The premium generated through the call options allows JEPI to maintain a high yield.
Whether you're just walking into the world of investing or getting closer to retirement, generating a powerful stream of regular income is a key goal for any investor. To do this, many turn to dividend paying stocks. Dividends are regular payments some companies make out of their profits. But you can also invest in dividend-paying ETFs. These are professionally managed funds that can invest in hundreds or even thousands of dividend paying ETFs.
Dividend yields are a driving priority among many investors, especially retirees and others who are dependent on dividend income for paying living expenses. An emerging secondary demographic consisting of Gen-Z and some Millennials who use high monthly dividends in a dividend compounding program for wealth building purposes has also arisen. Exchange Traded Funds (ETF) and Closed End Funds (CEF) that pay high monthly dividends are numerous and offer a wide range of choices.
How can you turn your portfolio into a cash-flow machine? One strategy is to hold shares of investment/financier companies (i.e., businesses that invest in other businesses) that pay decent dividends. You can reinvest the cash distributions more frequently, leverage the compounding effect, and potentially grow your wealth even faster when the financier companies pay monthly dividends. Therefore, today I'm giving you five stock picks that pay dividends month after month.
