Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
While the fear of missing the AI bandwagon keeps investors excited about tech stocks, long-term investors are looking for the sweet spot between stable dividend income and capital gains via stock price appreciation. Last month, Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America, advised investors to focus on dividend stocks during an interview with Bloomberg.
“I think you want to have safe dividends. And I know this is the most boring call of all time, but sometimes boring is a good thing. And you know, if you think about where we are right now, we’re in an environment,” said the analyst.
Don’t miss:
About seven months ago, a dividend investor shared an update on his investing journey on r/Dividends — a Reddit discussion board with about 600,000 members. According to the portfolio screenshots shared by the investor, he earned $138,000 per year or $11,500 per month in dividend income. He confirmed these figures when someone specifically asked him about his income in the comments section.
This investor’s portfolio was worth approximately $2.6 million, yielding a dividend yield of over 6.1%. The dividend portfolio had only seven positions and 94% of the portfolio was invested in ETFs.
When asked about his investing journey and what he did for a living, the investor said:
“30 years in which both my wife and I had engineering jobs and lived very frugally, combined with 30 years of investing.”
The investor was then asked to explain what he meant by ‘very economical’. His response provides insight into the patience and long-term commitment required to achieve substantial and reliable dividend income like his:
“It’s actually depressing to talk about. We buy food on clearance and only go out to eat with a Groupon. My wife is a great cook and I’m a great cook, so we usually cook at home. We don’t go out and do nothing “fun” most people do. We rarely buy anything for entertainment. Our cars are old, but I maintain them all.”
Based on the details shared publicly by the investor, let’s examine the top holdings of this high-yield dividend portfolio.
See also: A billion dollar investment strategy with minimums as low as $10 – you can be part of the next big real estate boom today.
This is a paid advertisement. Please consider the Fundrise Flagship Fund’s investment objectives, risks, charges and expenses carefully before investing. You will find this and other information in the The prospectus of the fund. Read them carefully before investing.
JPMorgan Equity Premium Income ETF
JPMorgan Equity Premium Income ETF (NYSE:JEPI) was the investor’s largest holding, with 10,525 shares. JEPI generates income by investing in large-cap US stocks and selling call options. Top holdings include AbbVie, Nvidia, ServiceNow, Trane Technologies and Progressive Corp. The fund has a dividend yield of over 7%.
JPMorgan Nasdaq Equity Premium Income ETF
According to screenshots the Redditor shared publicly, approximately 24.4% of the portfolio, worth more than $2.26 million, was allocated to the JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ). JEPQ is another high-yield covered call ETF in the Redditor’s portfolio, which earns about $21,000 in dividends annually. The ETF invests in Nasdaq companies and generates additional income by selling call options.
Schwab US Dividend Equity ETF
The portfolio screenshots shared by the investor who earned $138,000 per year or $11,500 per month in dividends showed that Schwab US Dividend Equity ETF (SCHD) was the third largest holding. SCHD tracks the Dow Jones US Dividend 100 Index and exposes investors to some of the best dividend stocks trading in the US, including Home Depot, Coca-Cola, Verizon, Lockheed Martin, Pepsi and AbbVie, among others. This ETF may be ideal for investors looking for higher returns rather than just dividend income.
Amplify CWP Enhanced Dividend Income ETF
Amplify CWP Enhanced Dividend Income ETF (NYSE:DIVO) was the Redditor’s fourth-largest holding, earning $11,500 in monthly dividend income. The ETF generates monthly income by selling covered calls. The ETF’s top holdings include UnitedHealth, JPMorgan, Caterpillar, Home Depot and Procter & Gamble. The ETF has more than $3.4 billion in assets and has become extremely popular on Reddit. According to a Redditor who did some backtesting in November 2022, a $10,000 investment in the ETF at its inception in 2016 would have increased to $19,970 versus $19,614 for SPY with dividends reinvested. As of October 15, the ETF yields approximately 4.4%.
The Simplify Volatility Premium ETF
The Simplify Volatility Premium ETF (NYSE:SVOL) accounted for about 2.9% of the Redditor’s total portfolio and generated $138,000 in revenue per year. The investor had about 1,100 SVOL shares, according to the screenshots he shared. SVOL, which has a yield of about 16%, generates income by shorting the CBOE Volatility Index (VIX) and betting that volatility will remain stable or decline. Because the broader market tends to move higher in the long term, investing in this ETF is suitable for those looking for stable income checks.
Real estate income
Realty Income Corp (NYSE:O) is perhaps the most popular monthly dividend stock, with a yield of around 5%. The company has increased its dividends for 30 years in a row. The Redditor, who earned $11,500 a month in dividend income, owned just 547 company shares, accounting for 1.2% of the total portfolio.
Intel
Intel Corp (NASDAQ:INTC) represented just 0.3% of this high dividend income portfolio. Although Intel is a semiconductor giant and returns about 2.2%, the stock is in trouble due to Wall Street concerns that it is lagging behind competitors like Nvidia in the AI race. INTC shares have lost 52% of their value so far this year.
Someone poked the investor about Intel. Here was his response (remember, this was seven months ago):
“I have over 30 years of experience in the semiconductor industry. lol, I sold a lot of the stock for about $50.”
The current interest rate environment has created an incredible opportunity for income-seeking investors to earn huge returns, but not through publicly traded REITs.
Arrivald Homes, the Jeff Bezos-backed investment platform, has launched its Private Credit Fund, which provides access to a pool of short-term loans backed by residential real estate with a net annual return of 7% to 9% paid out monthly to investors. In August it paid 8.1%. The best part? Unlike other private credit funds, this one has a minimum investment of just $100.
Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener has the latest offerings.
Wondering if your investments can earn you a $5,000,000 nest egg? Talk to a financial advisor today. SmartAsset’s free tool matches you with up to three vetted financial advisors serving your region, and you can interview your advisors for free to decide which one is right for you.
This article Dividend Investor Earns $11,500 a Month Stock Portfolio Details: Top 7 Stocks originally appeared on Benzinga.com
