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Top 9 Stocks and ETFs

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Should you invest in growth stocks for capital gains through price appreciation or dividend stocks for stable, reliable income? There’s no one-size-fits-all answer, but patient investors are crushing it with income strategies, earning significant returns through regular dividends.

About two months ago, a dividend investor shared his success story and earnings report on r/Dividends – a community of over 600,000 members on Reddit. The 48-year-old investor said he collected about $2,200 a month in dividend income from a portfolio worth $378,351. This gives the portfolio a solid dividend yield of more than 7%.

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The investor was asked about his expectations regarding the capital growth of his portfolio. Here was his answer:

“I expect it to grow between 5 and 7% annually without reinvesting dividends. Yes, I reinvest dividends. Now that the dividends are reinvested, I expect it to grow 8 to 10% annually.”

Based on the screenshots the investor shared publicly, let’s examine some of the biggest assets in this high-yield dividend portfolio.

Vanguard 500 Index Fund Admiral Shares

Vanguard 500 Index Fund Admiral Shares (MUTF: VFIAX) was one of the Redditor’s largest holdings, earning $2,200 per month in dividends. His portfolio screenshots showed that VFIAX represented approximately 34.5% of the entire portfolio. This fund tracks the S&P 500 Index, with approximately 79% of the portfolio consisting of large-cap stocks. The fund yields 1.3% and pays quarterly dividends.

Fidelity Total Bond K6 Fund

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Fidelity Total Bond K6 Fund (FTKFX) invests in U.S. Treasury bonds, investment grade corporate bonds, mortgage-backed securities and other debt instruments. The fund is suitable for investors who are looking for safer fixed-income investments instead of shares. FTKFX has a dividend yield of approximately 4.5% and pays monthly. About 32% of the investor’s total portfolio, which earned $2,200 per month, was invested in FTKFX.

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