Don’t miss this important truth: “Dividends contribute more than one-third of long-term total return from equity.” (S&P Dow Jones Indices Research) If you want to get rich quick, don’t buy dividend stocks. If you want growing returns AND growing income over the long haul, then you are like me. I like those aristocrats.
An aristocrat is a person of nobility. They are the elite in a society. According to Investopedia, a dividend aristocrat is “a company that has continuously increased the size of dividends it pays to its shareholders. To be considered a dividend aristocrat, a company must typically raise dividends consistently for at least 25 years.”
While I don’t invest solely in dividend aristocrats, I do care about what a company has presented owners when it comes to dividends and earnings for the previous 5-10 years. Increasing dividends high on my list of requirements for any stock. While this requires work, it keeps on-going expenses at 0.0% and it gives me the flexibility of choosing what I believe are the best-of-the-best.
If you don’t have the time and energy to do that, I believe you would do well to invest in the S&P 500. This group of companies contains aristocrats and some commoners as well. Here are some good choices with low expense ratios. You can buy IVV and FXAIX with no trading costs at Fidelity Investments.
IVV – iShares Core S&P 500 ETF Exp. Ratio 0.04%
VOO – Vanguard S&P 500 ETF Exp. Ratio 0.04%
FXAIX – Fidelity® 500 Index Fund Exp. Ratio 0.015%