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Why Invest In Dividend Aristocrat ETFs Now?

There is hardly a market scenario where dividend investing fails to soothe jittery investors’ nerves. Though many thought that the bull market for dividend investing will end with the start of the Fed policy tightening and the resultant rise in bond yields, in reality, the popularity of dividend investing has shot up in recent times. This was because of the sharp rise in global growth issues, which is why equity markets are running a high risk of volatility and bond yields remained in check despite the Fed liftoff. The demand for safe havens and value investing has lit up. Investors hungry for yields are running to high-yielding options in the quest for regular current income, which can make up for capital losses. Agreed, benchmark yield-beating options will be in focus given the ongoing Fed policy tightening. But in the present volatile market, dividend aristocrats – which are more stable, mature and profitable companies consistently raising dividends or going for high payouts – may serve up investors’ objective more efficiently. Why Dividend Aristocrats Are Superior Bets Now? These dividend aristocrat companies are generally apt for value investing. Since volatility is expected to pull the string ahead, what could be a better option than superior dividend investing for capital appreciation and some smart yields? In a market crash, these dividend aristocrats stand out and even navigate through volatility. As per the latest study carried out by Reality Shares, companies that initiated or hiked their dividends have beaten those that kept their dividends same, paid no dividend at all, or cut or scrapped dividends in the 1999-2015 time frame. This can be corroborated by the gains during the above-mentioned period, as dividend initiators and growers earned 5.4% return, the highest among the dividend players. All dividend payers took the second spot with 4.29% gains, followed by 1.92% gains enjoyed by dividend distributors with the same dividends. However, no-dividend payers or dividend cutters and scrappers recorded losses of 0.8% and 5.99% respectively, as per the document. Below, we highlight four dividend aristocrat ETFs which may give a relatively stable performance in the coming months amid further Fed rate hike bets, developed market woes and China’s hard-landing fears, and the occasional global market rout. Vanguard Dividend Appreciation ETF (NYSEARCA: VIG ) VIG follows the Dividend Achievers Select Index, which is composed of common stocks of high-quality companies that have a record of increasing dividends for at least 10 years. The $18.2 billion fund is currently home to 179 securities. The ETF is heavy on Industrials (22.4%) and Consumer Goods (21.6%). With an expense ratio of 0.10%, this is one of the cheapest funds in this space. It yields 2.46% annually, and was down 6.7% in the last one year (as of January 11, 2016). VIG has a Zacks ETF Rank #2 (Buy). SPDR Dividend ETF (NYSEARCA: SDY ) This fund provides exposure to the 101 U.S. stocks that have been consistently increasing their dividend every year for at least 25 years. It follows the S&P High Yield Dividend Aristocrats Index, and has amassed $12 billion in AUM. Volume is solid, exchanging more than 765,000 shares in hand, while the expense ratio comes in at 0.35%. The product is widely diversified across components, as each security accounts for less than 2.46% of total assets. Financials is the top sector, taking up one-fourth of the portfolio, while Industrials (14.7%), Consumer Staples (13.9%), and Utilities (12%) round off the next three spots. The fund was down nearly 10.4% in the last one year (as of January 11, 2016). SDY yields 2.80% and has a Zacks ETF Rank of 3 (Hold). Schwab U.S. Dividend Equity ETF (NYSEARCA: SCHD ) This $2.9 billion fund tracks the Dow Jones U.S. Dividend 100 Index, which measures the performance of high dividend-yielding U.S. stocks that have a record of consistently paying dividends. The 106-stock fund charges a meager 7 bps in fees. Consumer Staples is the fund’s focus sector with about 23% exposure, followed by IT (19.3%). SCHD yields 3.13% annually (as of January 11, 2016) and lost 7.1% in the last one year. It also has a Zacks ETF Rank #3. WisdomTree U.S. Dividend Growth ETF (NASDAQ: DGRW ) This fund tracks the WisdomTree U.S. Dividend Growth Index and offers diversified exposure to U.S. dividend-paying stocks with both growth and quality characteristics. It has gathered $594.5 million in its asset base. The ETF charges 28 bps in fees per year from investors. DGRW holds 300 securities in its basket, with each holding less than 4.16% share. From a sector look, it provides double-digit allocation to Consumer Discretionary (20.11%), IT (19.48%), Industrials (19.23%), Consumer Staples (18.59%) and Healthcare (14.95%). The fund has shed 6.1% in the year-to-date time frame and has a Zacks ETF Rank of 3. Original Post

What Powerball, Stocks, And Contrarianism Have In Common

“You’ve got to kick fear to the side, because the payoff is huge.” – Mariska Hargitay We all know that the lottery is random, and that the odds are one in 292 million. Maybe you’ll get lucky and win it all, or maybe you’ll split the payout because multiple people luckily choose the same winning numbers. But keep in mind that the higher the lottery jackpot goes, the more likely you are to split the pot with others. Lottery participation is not linear. Every new dollar increase in the jackpot game after game does not bring with it a set new number of people who play. Rather, the larger the jackpot, the more exponential the number of people who play becomes. That means the more attention the lottery gets, the odds of splitting the payout with others actually increases. Meaning if you really want to play the lottery, the best way to do so given the same odds of choosing the right numbers is actually to bet on a jackpot that is high, but not high enough to attract a large number of new players. And this relates to the stock market how? The more an investment is talked up (largely because that investment has already moved and made a boat load of money), the more likely you are to split the payout among others listening to the same reasons to buy that particular investment. The more people know about a big payout, the more likely you are to split the pot and not make as much as you hoped. There is a high correlation to the amount of attention the Powerball and stock market gains receive from the media and the jump in the number of new entrants who come in afterwards This is where contrarianism comes into play. Few people pay attention to losing investments. Those who do will often be too scared to buy in after a large drawdown, even though the very definition of “buy low, sell high” is based on those depressed prices that happen peak to trough. Some will argue that if a stock, asset class, or strategy is down, it must be down for a good reason. As we know from several quantitative studies of markets, however, that “good reason” may be either 1) legitimate, 2) random, or 3) based on a cycle that simply doesn’t favor that investment. We show the latter point as being a major one in our award winning papers related to predicting stock market volatility. Being a contrarian isn’t about going against the crowd. It’s about betting on a jackpot which few other players are betting on, so the odds of you splitting the payout are much lower. Let’s apply this to today’s market. Ask yourself very simply – where have most people overweighted their portfolios? What is the overarching narrative? Where are most people betting? Likely on the “cleanest dirty shirt” on the global landscape, which is the US stock market. Why? Because Fed policy and the Age of QE, combined with ever faster information flow from the internet has resulted in a similar Powerball mentality among a large portion of the investor landscape. Make no mistake about it – though we may hear stories about investors “selling” US stocks (NYSEARCA: SPY ) in this volatility, you can’t unwind 5+ years of divergence from the rest of the world in 5+ trading days. Where does the contrarian look to now? Reflation through a bounce in commodities (NYSEARCA: DBC ) and emerging markets (NYSEARCA: EEM ), both of which no one seems to want to buy a ticket on. Of course that doesn’t mean you buy that ticket right here, right now. But that also doesn’t mean you should ignore what on the surface looks like a low payout right now. 6 11 19 48 54 06 QP

5 Top-Rated MassMutual Mutual Funds To Invest In

Massachusetts Mutual Life Insurance Company, commonly known as MassMutual, is one of the leading asset managers by virtue of managing around $600 billion of assets along with its affiliates. Founded in 1851, MassMutual uses a multi manager approach to offer services including life policies, money management, and retirement planning to its clients throughout the globe. The company and its subsidiaries, which include OppenheimerFunds, provide investment opportunities across a number of mutual funds from different categories. Below we share with you 5 top-rated MassMutual mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. MassMutual Premier Disciplined Growth Fund A (MUTF: MPGAX ) primarily focuses on acquiring common stocks of growth-oriented companies. MPGAX invests in securities of companies with more than $200 million of market capitalization in order to provide total return higher than the Russell 1000 Growth Index. The MassMutual Premier Disciplined Growth A fund has a three-year annualized return of 12.4%. As of September 2015, MPGAX held 458 issues, with 7.31% of its assets invested in Apple Inc. (NASDAQ: AAPL ). MassMutual Premier Main Street Fund (MUTF: MMSYX ) seeks a high level of total return. Though MMSYX invests in common stocks of companies irrespective of market capitalization, it currently emphasizes investing in securities of companies having market capitalization similar to those listed in the Russell 1000 Growth Index. MMSYX may also invest a maximum of 15% of its assets in securities of companies located in foreign lands. The MassMutual Premier Main Street Service fund has a three-year annualized return of 10.8%. MMSYX has an expense ratio of 0.86% as compared to the category average of 1.04%. MassMutual Premier Balanced Fund (MUTF: MMBLX ) invests in both equity and fixed income producing securities. MMBLX allocates between 40% and 70% in domestic equity securities, and invests between 1% and 15% in foreign equity securities. MMBLX invests 30-50% of its assets in securities that are expected to provide fixed income, and allocates not more than 30% of its assets in the money market instruments. The MassMutual Premier Balanced Administrative fund has a three-year annualized return of 5.5%. As of September 2015, MMBLX held 1,166 issues, with 5.83% of its assets invested in Us 5yr Note (Cbt) Dec15 Xcbt 20151231. MassMutual Premier International Equity Fund (MUTF: MYIEX ) seeks growth of capital over the long run. MYIEX invests a large chunk of its assets in common stocks of non-U.S. companies that are believed to have impressive growth prospects. MYIEX allocates its assets in companies located in both emerging as well as developed countries. The MassMutual Premier International Equity Service fund has a three-year annualized return of 3.6%. George R. Evans is one of the fund managers of MYIEX since 1994. MassMutual Select Diversified Value Fund (MUTF: MDDLX ) maintains a diversified portfolio by investing the lion’s share of its assets in stocks of well-known, large-cap companies. MDDLX generally invests in securities of domestic companies that are believed to be undervalued. MDDLX may invest not more than 25% of its assets in securities of foreign companies and ADRs. The MassMutual Select Diversified Value Administrative fund has a three-year annualized return of 9.3%. MDDLX has an expense ratio of 0.88% as compared to the category average of 1.11%. Original Post