Hey YouTube.
I'm Jimmy in this video I'm walking
through creating an ETF dividend
portfolio for anyone who
wants great dividends.
ETF is short for exchange traded
funds.
So in my last video called
an investment portfolio for beginners
I talked about the ETF's that I
would include to build a solid portfolio.
The goal there was to focus on
high quality companies safety
diversification
and some growth.
In this video I'm looking for the very
same thing except
instead of growth I'm looking for
high quality dividends.
Now I'm creating two different ETF
dividend portfolios in two
different videos.
Today's video is going to focus
on a stable dividend portfolio
made up of ETFs.
Once again I'm after quality
and diversification
and we'll likely end up
with a reasonable dividend yield of
about three and a half percent.
Then in our next video we're going to go
after more yield.
Once again we're going to need diversification
because of all the benefits that diverse diversification
brings to the table.
But because we'll be targeting close to let's
say a 6 percent dividend yield
for that portfolio.
Well we're likely going to have to find a more
specialized ETF.
And we're probably enough to pay higher dividend
ETF fees because of it.
But I expect our diversification
to help stabilize that portfolio.
Now for both of these videos
I'm going to do the same thing that I did in the beginner
video and that is I'm going to focus
focus on using a satellite portfolio
and a satellite portfolio just so we're
on the same page.
The idea behind it is that you have a core group
of holdings
and then each individual each of us
select our satellite positions
to go around our core holdings
perhaps the satellite positions are
designed to get more dividends
or more stability
or more growth
or more safety
or whatever it might be.
I'll throw out my two cents
for what could be added to each of the portfolios
from a satellite perspective.
Okay. So let's get started.
So we'll call this portfolio.
Our long term dividend ETF
portfolio.
Again our goal is to find
our core set of holdings
and then we'll talk satellite positions after that.
So my first core Dividend ETF
is the pro shares S&P 500
Dividend Aristocrats
ETF Ticker symbol NOBL.
NOBL
has a fee of 35 basis
points. They have about fifty three holdings
and their dividend yield is about two point four
percent. Now this ETF focus
on the S&P 500 companies
that have consistently paid
and increased dividends for many
many years.
So you end up with core holdings like
Coca-Cola,
Becton Dickinson,
and Aflac. Companies like that.
OK now before we get into the weightings
how we would weigh that we're going to go through each of the companies
first. OK onto the next company.
So for our next holding I'm
looking at the Oppenheimer
ultra dividend revenue ETF
ticker symbol RDIV.
RDIV
Has a fee of 39 basis points.
They have about 60 holdings
and they have a dividend yield of about 4%.
Now the goal of this ETF
is to invest in companies
with low dividend payout ratios
meaning that they have plenty of room for
the dividends that they do pay.
Maybe even some room to increase them.
Now the tricky part of building this
type of portfolio is
not to duplicate too many of the underlying
holdings.
I didn't want to pick four
or five ETF's that all invest in
the same companies.
Well if we're gonna do that well we might as well just pick
one good ETF.
So I was careful not to have our underlying
overlap too much.
That being said these two ETF's
only have three holdings that
I saw that overlap.
They both have Chevron,
Exxon Mobil,
and Consolidated Energy.
But luckily for us this will matter
too much since these holdings
will just be a fraction of our entire portfolio.
Okay. Onto our next holding
the next holding add some stability to our
portfolio
and it has a nice yield.
It's Vanguard's long
term bond ETF ticker
symbol BLV.
BLV has a fee of just 7
basis points it holds over 2000
different bonds so clearly it's well
diversified it invests in
corporate bonds
and government bonds
and it's got a ton of different ones
and BLV has a dividend yield
of about 4% so it adds
a decent amount of dividend to our portfolio.
Okay. Our last holding in our
dividend ETF portfolio is
the S&P international Dividend
ETF ticker symbol DWX.
DWX has a fee of 45 basis
points it has over 100 holdings
and it has a dividend yield close to 5%.
This ETF has holdings like the
National Australia Bank
and Singapore Telecommunications.
So clearly this is a nice
diversifier to our other core holdings.
Now as far as the weightings go
here's how I would weight.
These four core holdings I
would do 35% NOBL
and 35% RDIV.
I really like these two dividends.
ETF's they have solid companies in them.
They're likely to be around for a long time
and consistently pay out reliable
dividends then I
would weigh both BLV
and DWX
with 15%.
Once again their solid diversifies.
And when we combine them into this portfolio
they give us our target dividend yield
of about three point five percent.
Now we have our core holdings.
What about our satellite holdings.
Well in our last video I picked
individual companies that I thought would complement
that portfolio
and I believe that many of those companies
would do a good job of complementing
this portfolio as well.
Now those were companies like AT&T
Home Depot Microsoft
Boeing was brought out in the comments
in that video.
I also mentioned Chevron.
I probably avoid Chevron because you know that's
in two of the ETF's.
So no reason to triple dip
but the list goes on
and on as far as companies that could be added
in our Dow 30 analysis where we're analyzing
all 30 companies in the Dow Jones industrial
average. We hit on a whole bunch of different companies.
So if you're looking for individual names
that might be a pretty good place to start
if you're interested as to how we did our research.
Now I also think it makes sense to complement
this portfolio with additional ETF's.
So in looking for some additional
ETF's I looked at something like a Alerian's
MLP ticker symbol AMLP.
They have a dividend yield of right around 8%.
Sure they're a very volatile ETF
but that dividend could add a nice
boost. They focus on energy.
So if we're okay
with the additional energy exposure they might
be a good addition.
Another good addition could be the mid-cap
ETF that I brought out in the last
video their ticker symbol's.
IJK
and IJK is
a mid-cap growth ETF.
And if the goal is to pick up
a little bit of dividends
but really target growth
that ETF could be the way to go that
ETF has a dividend yield of slightly over 1
percent.
Another interesting holding would be the
iShares U.S. preferred stock
ETF ticker symbol PFF.
They invest in U.S. preferred stock
and they have a dividend yield of more than 6%.
That could make a great addition to this portfolio
from both a dividend standpoint
and from a diversifier standpoint.
Since we don't have any preferreds in any of the
other stuff that we own.
But like I said another possibility
pick individual stocks
and you could go to our Dow 30 analysis
for some of those.
And this brings me to one final point.
Let's say that you're just starting out investing
and you don't have quite enough
money to get started when it
comes to putting together an entire portfolio.
But you want to get started as soon as possible.
Well here's how I would do it.
What I would do is I would gradually build
up to get to whatever
your version of a portfolio like this
would be for me instead of waiting
until I have all the money to buy all the shares
I need to properly weight the portfolio.
Well I would instead buy them
one share at a time if necessary
I would buy them in a specific order.
So for me I would start
with either RDIV
or NOBL.
RDIV is a bit more of an aggressive
ETF
but it's got a better yield.
So if that works for you that might be a good
place to start.
NOBL has larger companies
and is a bit more stable
but it's got a lower yield.
So it would really be a preference thing
but I would start with one of those two if
dividends the most important start
with RDIV.
If it's stability you care about
start with NOBL
and then as soon as you have the one
once you're able to go get the second
one and then I will move right down the line
I would buy BLV third
and I would be doing DWX fourth
and just keep adding to the portfolio
until you're happy
with the size of the portfolio
and not until you're happy
with the size
and you get the weightings where you're happy
with them. Well then I would consider adding
satellite positions
but not until you get your core portfolio
in place. So let me ask you how
would you build your portfolio.
Would you do it the same way.
Would you prefer to build that one share at a time
or would you rather save
up enough cash
and then launch the entire portfolio all is
all at once.
If you did it that way you pay less commission charges
so that's something to be said about that.
What about your satellite holdings.
What companies would you add
or what ETF would you add.
Let me know what you think of the comments below.
And if you haven't done so already hit the subscribe
button. And thank you for sticking
with me all the way to the end of the video
and I'll see in the next video.