We believe dividend growth investors can generate superior long-term returns by investing in high-quality dividend stocks, such as the Dividend Aristocrats.
The Dividend Aristocrats are a group of 65 stocks in the S&P 500 Index, that have each raised their dividends for at least 25 years or longer.
Investors can buy high-quality dividend growth stocks such as the Dividend Aristocrats individually, or through exchange-traded funds.
First, investors should get to know the basics of exchange-traded funds.
ETFs typically track an index, but can take on a variety of investment strategies.
ETFs come in all shapes and sizes–including small-caps, mid-caps, and large-caps; growth ETFs, value ETFs, or income ETFs; and ETFs that invest in specific market sectors or industries.
Certain ETFs also deploy the use of leverage, to amplify returns. However, investors should understand that use of leverage can backfire.
There are many good reasons for income investors to consider the Dividend Aristocrats.