VHYAX
Vanguard High Dividend Yield Index Fund Admiral
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Is now the time to get into High Dividend Yield Index Funds?
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If you want to set and forget, why are people using VOO and not, say, VFIAX or VHYAX?
Might consider Vanguard's VHYAX. It should be less volatile than a fund like VOO, though of course not as safe as a HYSA. The safest investments generally pay non-qualified dividends. Or, if you go with municipal bonds, you'll pay for the tax break with an extra-small yield. On the other side of the spectrum, investments that don't distribute dividends at all tend to be on the risky side.
Disagree. There are plenty of stocks with dividend yields well above 1%. The OP might consider Vanguard's VHYAX and VIHAX funds.
If you're focusing on mutual funds and want high yield, Vanguard High Dividend Yield Index Fund (VHYAX) is a strong choice, low cost (0.08%), solid dividend exposure, and $3,000 minimum if you go direct. For a more active but still income-oriented approach, Fidelity Equity-Income Fund (FEQIX) has no minimum and consistently focuses on blue-chip dividend payers. If you want diversification beyond Vanguard, Schwab Dividend Equity Fund (SWDSX) is another low-cost, quality pick. All three work well for long-term income-focused investing without needing ETFs.
Good? You mean good equity funds? LOL. I wish I could guarantee good. I have VHYAX, VVIAX, VEIPX, SCHD, JEPI, IVE
Sounds like my wife's 401k. Really limited options. As soon as you're able, roll it over to a Trad. IRA so you can buy CDs and actual bonds (not bond funds, which I don't trust — some of them are down 25% over the last 2-3 years). I'm in a similar position with a lot of our retirement savings (we're about 5 years from retirement), and I'm using SCHD or VHYAX since these will drop less than S&P500 (in a correction/crash) and pay a decent (3.6%) dividend in the meantime. If markets continue to go up, I'll have lower gains, but I can live with that. I know it's written into the law for 401k accounts, but why why why can't we buy CDs (or even keep money in cash) in these accounts???
>Dividend stocks drop less in a bear market or a pullback This needs justification. **VIG / VIGAX (Vanguard Dividend Appreciation Index):** -50.66% drawdown vs -55.25% for S&P500. Volatility is slightly higher (20.52% vs 19.36%) **VYM / VHYAX (Vanguard High Dividend Yield Index):** -56.98% drawdown vs -55.25% for S&P500. Volatility is slightly lower (18.53% vs 19.97%) **SCHD (Schwab US Dividend Equity):** -33.37% drawdown vs -33.83% for S&P500. Volatility is slightly lower (15.59% vs 16.89%) I don't see any prominent difference, and this is including re-invested dividends (ie, best case for dividend stocks for minimizing volatility). Risk-adjusted returns are similar in all cases as well.
Put a million dollars into VHYAX or VEIPX and relax with your $50k annual dividend income.
Investing routinely in diversified, low expense equity index funds is a good strategy. I would not pick VOO and SCHD, but you could do a lot worse. Vanguard does not allow auto investing in ETFs, only in Vanguard mutual funds. VFIAX is the Vanguard mutual fund equivalent of VOO. It has a $3000 minimum initial investment. Vanguard has some dividend funds, like VDADX, VDIGX, VHYAX. I don't know how similar they are to SCHD.
You can auto-invest through its mutual fund equivalent: SWDSX, it's expense ratio I think hovers around .9%. Vanguard has its own version: VHYAX, which may have smaller expenses.
>Historically, over the long run dividend-paying stocks have provided better returns. \##**You got a sauce for that?** Vanguard High Dividend Yield Index Fund vs. S&P 500 ETF, shows at no point in the last 10 years has that been true and Over 10 years a 27% better yield. In the year-to-date period, VHYAX achieves a -1.13% return, which is significantly lower than VOO's 13.90% return https://portfolioslab.com/tools/stock-comparison/VHYAX/VOO
Money market fund, simplest way to get yield with minimal work if you already have a brokerage account with most big name brokerages. I personally like VUSXX, invests in bonds and paying around 5% currently with a low expense ratio. Park it, set it and let us compound monthly until returns on bond yields falls relative to other investments. Once things normalize in the markets, I would probably move into a vanguard low volatility dividend fund like VHYAX. Low volatility and wealth conservation is the most important for your mom
Vanguard knows their stuff. Here are the top three holdings in their "High Dividend Yield" ([VHYAX](https://investor.vanguard.com/investment-products/mutual-funds/profile/vhyax)) index fund: 1. Exxon Mobil 2. Johnson & Johnson 3. JPMorgan Chase
My mom needs to withdraw $20,000 from her retirement funds. She has a total of $500,000 left including $300k in her 401k and $201k in her brokerage. 22% bonds and 78% index funds. The bonds are wayyyy down 20% since she bought them in 2017. Everything else is still way up. So should she take out from the bond funds or index funds for the $20k? VFICX $31,914 VHYAX $56,141 VTABX $20,525 VTSAX $59,024 VTWAX $5,208 VWESX $31,043
I have the vast majority of my retirement accounts in Vanguard index funds. I wouldn't call them 'plays' though, they are buy and hold with expense ratios at .03-.05. VFIAX, VHYAX, VTSAX, VIGAX etc etc
I do my Roth IRA entirely in dividend funds, basically helps you increase the contributions you can make every year due to dividend reinvestment. Combine that with mega back door Roths every few years, and the fact that you don’t have to pay taxes on the dividends like you would in a brokerage account, great way to supercharge your Roth account value. Also since high dividends are more tied to value stocks they aren’t as susceptible to downturns like sp500 has seen this year. The fund I’ve been in, VHYAX is only down about 8% ytd vs closer to 20% for the sp500
Yes, a decision to pay shareholders with dividend cash is somewhat like a bribe. But the same could be said about bond coupons, which in theory could be promised on maturity date and not sooner. Ultimately, there are always people who need some money by a certain date/on a schedule and thus have a use for investment choices with structured payouts. I believe the paper offers some real-world data behind a possible decision to invest in Vanguard's VHYAX(VYM) and/or VDADX(VIG). I have been doing so even though I read it and am aware of the paradoxes inherent in "[reaching for dividends](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2678958)". The utility of some money in the hand vs total return in the bush is real for me. I believe that paying regular dividends imposes a certain amount of discipline on a firm. (I also believe that "growth" will be regressing to the mean in the next few years and am fine tilting towards "value" at the moment.) The paper also touches on "just high yield" vs "yield growth over time". People have looked at data for that, too: * (2012) [OSAM Research: Dividend Yield vs. Dividend Growth](https://www.osam.com/Commentary/dividend-yield-vs-dividend-growth) and more general "shareholder yield" as a means to compensate for the fact that US dividend taxation varied over time, with advantage shifting to buybacks over time, etc: * (2016) [Why ‘Shareholder Yield’ Beats ‘Dividend Yield’](https://mebfaber.com/2016/08/10/9774/) This topic is surprisingly complex and full of data contradictions. I deal with them by viewing high dividend tilt as a form of value tilt.
so then does that mean high dividend yield etfs arnt as good as index fund equivalent? Like VHYAX vs. VYM for example?
Did something similar. I had sufficient funds to pay for my daughter college without the need of student loans. The remaining amount I invested in a mutual fund for her. She turned 18 and I shifted the funds to her own account. She put it in a Vanguard dividend fund VHYAX in 2018.
I use VHYAX through Vanguard. Solid returns and diverse portfolio. The fund, like all the others, took a hit in early 2020 from the COVID impact on the markets. Took about a year to recover, but during that time, I continued to reinvest the dividends back into the fund and this has allowed me to recover and expand my returns.
With everything going on in the world, the US massive debt issue (not to mention various states), and the fact that markets are unpredictable, I'd DCA over a handful of years. There has always been this constant idea that the stock market must always, eventually, go up. The only true mathematical factor that I can think of that should guarantee an "up" is inflation. Just to use a simple example, if the S&P value was worth $1B Jan 2024, but on Jan 2026, $1B in cash from Jan 2024 was inflated to $1.2B, then logically speaking if nothing had changed with the S&P, it should obviously go up in value to match inflation. Outside of that, everything else is really just a casino wager, with likely better odds in your favor to win something long term. We have to trust what companies leaders tell us, we have to trust the government, etc.. Just remember, it took the Nikkei almost three decades to bounce back. https://asia.nikkei.com/Business/Markets/Nikkei-index-hits-30-000-for-first-time-in-three-decades You could put $100K in, have a huge massive down movement, then sideways for two decades, if not three! Another user posted a great article about reinvesting dividends and that is something I'd almost rather look for than bank on growth stocks that don't pay anything and are only flying high based on pure speculation. I would look at including funds such as VHYAX, VVIAX, and VIHAX
I am an extremely new trader, mid 20’s living in rural area (low expenses) with no money currently in the stock market besides a 401k from work. I am leaving my current job in the next month, and expect to have an income in 2-3 months of around 75-85k. I have 30k saved for emergency fund, an upcoming used vehicle purchase, and some student loan payments in May. I have around 20k that I am willing to invest (I will slow roll my investing amounts, not all at once). I am planning on putting 15k into mutual funds and dividend type stocks (VHYAX, NLY, SCHD), and then 5k into single stocks (I expect to learn painful lessons here). I do not mind taking higher risk positions, but starting out I will be more conservative until I understand more. I also would like to put 5k away in a High Yield Savings account, although it’s my understanding I should wait till March for this specifically. My goals are to own at least one rental property in the next 2-3 years. I would also like to pay off student loans (34k - 4.5%) in 3-5 years, but I understand that both of these goals may be mutually exclusive. With the incoming interest rate hikes in March 2022, should I hold off on entering the stock market until March? I want to buy in to the stock market at a low and believe that it will drop in March. I would love to hear from anyone about this or any advice you have for me. I am completely open to any criticisms as well. Thanks for reading this wall of text, sorry for the length.
There is a Vanguard fund specifically for high dividend stocks Ticker VHYAX
What happens usually for conservative investors following traditional paths is: once you’ve accumulated capital in a broad market index fund, you slowly decumulate by selling the funds in the most tax efficient way you can as you need cash. I don’t invest for dividends, so I cannot give you reasonable advice on that front. My warning about this is: try not to chase yield (high stock dividends). Healthy companies don’t pay a high dividend relative to their price without good reason. Usually a high dividend ratio means that the price has dropped—no one wants it, or they expect the dividend to be cut. I think this is what happened to your BP—the dividend cut was so expected that everyone sold it, making the price lower and backward dividend ratio look high, because the forward dividend outlook was so low. Another reason for high dividend ratios is that the company is structured to pay out large distributions, like a REIT or a MLP, where you will get taxed at a non-qualified, higher rate. My best guess using Vanguard funds is: The Vanguard High Dividend Yield Index Fund Admiral Shares (VHYAX) looks like the closest Vanguard index fund to your strategy. This fund tracks the FTSE High Dividend Yield Index with an expense ratio of 0.08%. For $150,000 worth of these, it looks like you get an average of $1050 every three months, but it fluctuates. https://investor.vanguard.com/mutual-funds/profile/VHYAX I’m sorry I could not help more. I wish you luck.
Simple interest: Ally CDs (https://www.ally.com) Fixed income: MMHYX and PONAX are ones I have. Use the screening tool from your brokerage to look at fixed income funds they offer with no load / no transaction fee. I don't really know that much about Fidelity - I use ETrade. But one very important thing to make sure of, especially since you're not leaving it in there very long, is that you're not getting charged a "load". Some funds will charge you, say, 3% of your investment. Well, if you're only leaving it there for a year or two, and you're fixed income, that's virutally your entire thing. Index funds: Anything Vanguard offers is amazing. I have VHYAX, VTSAX, and VB. I also have QQQ and SPY (which of course are not Vanguard). But again, look at what your broker offers you that doesn't have a load or transaction fee. DIA (also not Vanguard) is another one. It exactly tracks the Dow (its price is whatever the Dow is divided by 100).
Almost all funds pay some dividends, but funds like VHYAX target stocks with high dividends. This causes VHYAX to pay higher dividends than a fund like VTI. I recommend [this video](https://www.youtube.com/watch?v=f5j9v9dfinQ&ab_channel=BenFelix) on how to think about dividends. In general, if an investor seeks a stock or fund that pays high dividends, that will cause them to sacrifice diversification. It's arguably better to focus on a combination of capital gains and dividends -- your [total return](https://www.investopedia.com/terms/t/totalreturn.asp).
Is there a reason to choose a pure index fund without dividends over an index fund that gives dividends such as VHYAX? Is it different from normal stocks/dividend stocks where a high percentage dividend can hurt the stock or is there more at play woth index funds? How do I go about in finding different dividend stocks or index funds, is there a site with a collection of all dividend stocks?
For some company examples, I would look at the vanguard fund VHYAX, which aims for higher than average, slow growth dividend companies.