PFFA - Big Dividend Snowball: Buy DGRO And Just Two Other Funds

2024-05-19 05:04:13 ET

Summary

• Building an effective dividend snowball requires stocks with attractive current yields and dividend growth.
• The iShares Core Dividend Growth ETF is a great option for a core dividend growth snowball.
• We show how combining DGRO with just two other funds can create a powerful dividend snowball that provides lucrative current income along with strong long-term dividend growth potential.

An effective dividend snowball not only pays out an attractive current level of dividend income but also compounds and grows that dividend payout over time. Investors trying to build such a snowball are best served by finding stocks that offer an attractive combination of current yields and dividend growth. One way to do this is to buy broadly diversified funds that can be combined to generate sufficiently high yields with long-term inflation-beating growth rates. Since it is rare to find a fund that has both current yield and long-term dividend growth in sufficient quantity, one method is to combine funds that offer attractive dividend growth with other funds that may not have the same dividend growth prospects but offer attractive current yields....

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