A company that provides regular payouts exercises fiscal discipline, which can take years. Historically, dividend-paying stocks are less risky and produce more income than other stocks do.
Companies that pay dividends need stable cash flow, with enough profits to meet obligations and debts while paying shareholders regular dividends. This is why high-quality, dividend-paying stocks tend to hold up better than non-dividend-paying stocks, even during market declines — they're stable and derived from highly profitable companies that have plenty of cash and long-term endurance.
Provide quarterly cash income like regular checks. Use the cash to pay utilities, rent or mortgage, grocery bills, and more. Dividend stocks with a higher yield provide more money to spend per month. When you have a high-yielding, dividend-paying portfolio, you may generate enough cash flow to cover expenses without selling stock investments.There are more than 7,600 exchange-traded funds available, representing about $7.7 trillion – great odds to find ETFs that fit your needs.
It's important to choose a variety that spans industries and align with your investment outlook. If you're bullish on the U.S. economy, a fund of a cross-section of U.S. companies might be a good choice.
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