Stocks or ETFs for Cash?

 

With April 2023 coming to a close, I read a couple interesting posts about which is better when seeking dividend yield over the long run.

Before I get into that ... why bother with the accumulation of dividend cash? Investors use it to cover personal expenses, trips, tap into the cash when needed or buy more stock for dividend growth. 

Last week I read Globe and Mail's Rob Carrick's article about owning individual stocks over ETF's. 

Recently, Matt from Dividend Strategy weighed in on that debate which I'm sure is on a lot of DIY investor's minds, specially those just starting out.

BTSX vs Dividend ETFs

An individual's choice for sure. With a purchase into an ETF like Royal Bank's RCDC, your spread out into a number of top companies and banks by weight but ... your paying management fees and more than likely the monthly cash distributions will remain either steady or fluctuate like a lot of Blackrock's ETFs.

Some folks like the same steady cash distribution coming in so they know what they are getting without guess work or looking it up when distributions are declared.

When buying top companies and Banks individually and doing some research while keeping current on their sites and news, there's no management fees and dividends tend to grow each year or ... remain steady. 

There are commission free sites out there where buying stocks comes with no charge like TD's EasyTrade and Wealthsimple Trade (fractional stock 'buys' an option) in Canada.

I prefer dividend growth and the BTSX portfolio provides this with an average current yield of 5.75% over the 10 stocks. The only company I'm not into is AQN in the current BTSX portfolio. 

It's not 100% fool proof however and nothing in investing should be considered so. Every once in awhile, a company will stumble and make the decision to lower their dividends for the long or short term until their 'Books" stabilise and generate more cash flow in the future.

Like the football 2000 movie " The Replacements" starring Keanu Reeves and Gene Hackman there are plenty of replacements to choose from to make a winning combination and I own several like Sunlife Financial (SLF) and Telus (T) when it comes to accumulating dividend cash.

Mind Over Money

 

I've been reading the book, The Psychology of Money by Morgan Housel. 

Interesting stories about the pursuit of money and the way people think about it. What thoughts make billionaires broke and others maintain their savings, stocks, etc. with the patience to wait for growth/compounding to work along with examples of people who have experienced both

I have a plan going forward and I'm sure most do but I like this part ... You plan. God laughs.

Some plan and feel it is set in stone but I've been around long enough to know it has to be somewhat flexible because no one knows what's next to either disrupt your life or improve it and that goes for the stock world dealing with mindsets of fear and greed along with the luck and risk.

It's a great book and well worth reading about life, how the mind can manipulate the way you spend and save money ... learning from mistakes through the decades.

Ending April, I'll add to Emera (EMA) ... A Nova Scotia utility stock currently in the top twenty of the highest dividend yield of companies and banks in the TSX 60 list by dividend yield.

Another utility stock I'll add to in May is Fortis (FTS), based in St. John's, Newfoundland with interests in the US, Central America and the Caribbean.

With the Pipelines and going ex-dividend in mid-May and at the top of the list for dividend payers is currently Enbridge (ENB). 

These are all quarterly payers with the dividend that comes with earnings and dividend growth over the years.