What Stocks Should I Buy?
If you find an ETF or a mutual fund that fits your written investment plan, one thing you can do is look at the top ten investments in the fund to see where the fund manager is putting most of the fund’s dollars. For example, I have a strong preference for ETF DGRO. DGRO is the “iShares Core Dividend Growth ETF.” It has a 6-year history of dividend growth and a ten-year dividend growth rate of about 10%. The forward yield is currently 2.4%, so my main interest in this ETF isn’t yield, but rather dividend and asset growth.
DGRO ETF 2020 Semi-Annual Report
On page 4 of the October 31, 2020 DGRO Semi-Annual Report, the top ten stock investments are listed. Even new investors should recognize the names in the top ten list. They include Microsoft, JP Morgan, Apple, Johnson & Johnson (JNJ), and Coca-Cola. Sometimes, however, you will see the name of a business you don’t recognize. Rather than looking through hundreds of possible stocks for potential investments, you can pick one-or-two of a top-ten list and see if either of them fits your requirements.
If I did not own shares of JNJ, my next step would be to evaluate JNJ using my ten primary requirements. Those are shown in the following illustration. I highly recommend that you create your own due diligence checklist. Don’t buy investments based on what others are saying unless you like to take unnecessary risks.
Other Information Sources
You can find the top ten investments in any fund on Fidelity Investments or Seeking Alpha. There are many other sources, but those are the top two I frequently use.
Cindie and I own shares of DGRO, MSFT, JNJ, VZ, AAPL, PFE, and HD.