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Top 8 Stocks and ETFs

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Dividend investing is an efficient way to hedge against risk and market volatility. Data from Ned Davis Research shows that dividend stocks returned about 8.8% between 1972 and 2012, while their non-dividend stocks returned 1.6% annually.

But is it possible to earn a decent monthly dividend income for novice investors? Many investors achieve this by investing small portions of their savings or income in reliable and safe dividend stocks. Let’s take a look at a case study.

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In May of last year, a dividend investor shared his detailed investment journey, income report and stock portfolio on r/Dividends, a discussion board with more than 600,000 members.

The investor said he had reached the milestone of $600 per month in dividend income and provided some key details about himself before sharing his portfolio details:

“I’m 32 years old, working in IT since university, currently living in Dubai, married and have no children. I started my portfolio in 2019 and only bought VT for a while, but then I switched more to dividend growth investing ( it feels more motivating and fun).”

He had a goal of $4,000 a month before he could retire. Would that be enough to retire?

“My current goal is 4K per month, assuming I won’t be living in Dubai when I retire (this place is quite expensive). I’m thinking maybe Spain or Portugal. I earn a decent amount of money and my husband is also working , so we are building our financial future together,” he added.

The investor’s portfolio screenshots showed that the total value of his portfolio was $145,828. He collected about $601 in monthly dividends or $7,216 per year. The investor said he added $2,500 in monthly contributions and expected that to increase over time.

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Let’s take a look at some of the key investments in this dividend portfolio.

Schwab US Dividend Equity ETF

Schwab US Dividend Equity ETF (NYSE:SCHD) was among the Redditor’s top holdings. He earned $600 a month in dividend income on an investment of $145,828. He owned 513 shares of SCHD and his total stake in the fund was worth $36,195.

Schwab US Dividend Equity ETF (NYSE:SCHD) tracks the Dow Jones US Dividend 100 Index and provides exposure to top dividend stocks in the US, including Home Depot, Coca-Cola, Verizon, Lockheed Martin, Pepsi and AbbVie, among many others. Because SCHD’s investments tend to be conservative dividend payers, it is suitable for investors who are close to retirement and looking for consistent dividend income.

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