Many people are afraid of spiders, but investing in one may be a good choice. As Ray Hennessey, Editor of SmartMoney.com, explains, an SPDR, or S&P 500 Depository Receipt, isn't necessarily a bad thing.
While recent financial hype has been about the DOW reaching new all-time highs, "The S&P 500 is much broader and means more for the market," says Hennessey. The S&P 500 is about to hit a new record, but according to Hennessey, if dividends are factored in, that record would have been hit quite a while ago. "People forget about total return. They forget about how important those dividents that you buy from the stocks are to your overall returns," says Hennessey.
To find those all important dividends, Hennessey suggests looking for high-yielding stocks. "That gives you a stable, regular return... You want to make sure that fundamentally, it's a sound stock," says Hennessey.
If you're looking for something broader, you can always take a look at income funds. "These are mutual funds that invest in a range of companies and pay dividends and then give you those dividends back," says Hennessey. The plus side? You don't have to worry about picking your own stocks; it's already done for you.
You can also buy ETFs. "These are those baskets of stocks that trade like a stock on the exchange. There are a lot of them that are geared toward dividends," says Hennessey. With ETFs comes safety, yield and any added investment revenue that the market brings.
For more information on SPDR investing or other personal financial advice, click here.
by Erin Petrun
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