Posted on 30 July 2012.
Investing in Exchange Traded Funds that pay dividends makes sense for long term investors looking to maximize their investment gains. While long term investors main investment objective is to find investments that increase in price over time, they should not ignore the reality that investing in Exchange Traded Funds that pay dividends can increase their long term investment gains considerably, especially in volatile stock market that has existed over the past decade.
The unfortunate reality for long term stock market investors is that the stock market indexes have treaded water since approximately the year 2000. Major stock market indexes have made little to no discernible gains in years, as slow economic growth and uncertainty has caused stocks to trade within a range with sharp up and down swings. While Exchange Traded Funds that invest in stock market indexes have made little or no gains in recent years, since the broader stock market has stagnated, Exchange Traded Funds that pay dividends have consistently paid investors dividends, which over time can translate into significant investment gains.
What is enticing to investors regarding Exchange Traded Funds that pay dividends is the fact that no matter how the overall stock market performs, dividend paying Exchange Traded Funds will provide a return on their investment capital. If stock market indexes are down, and dividend paying Exchange Traded Funds are also down, the proceeds from dividend payments can be reinvested in dividend paying Exchange Traded Funds at lower prices, increasing one’s investment in the dividend paying Exchange Traded Funds and positioning a portfolio to take full advantage of any long term price appreciation that may materialize as the funds are held for a long period of time. Dividend reinvestment in Exchange Traded Funds can add up to considerable gains as the reinvested dividends are compounded over many years.
The following are some investment ideas regarding Exchange Traded Funds that pay dividends.
There are many Exchange Traded Funds that pay dividends to choose from in the Exchange Traded Funds universe; the ones provided above are just a sampling of dividend paying Exchange Traded Funds.
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