We feature some of the highest & best dividend
paying mutual funds available in the marketplace. In this age
of volatile stock markets, you need dividend mutual funds to cushion your
portfolio against a market downturn. Purchasing dividend paying
mutual funds eliminates the need to identify a handful of dividend
paying stocks & provides instant diversification
across a whole basket of stocks. Purchasing a single fund gets you diversification
across a whole range of sectors including Energy
& Gas, Banking, HealthCare,
Real Estate Investment Trusts (REIT), Telecommunications, Utilities, Technology,
Consumer Staples & Discretionary, etc. You should also consider
re-investing your dividends back in to your mutual fund for compounded
growth. This will make your portfolio grow much faster, in fact,
over the last 25 years, the S&P 500 Index has gained 914%. If you
add re-invested dividends, it soars to 2000!% Go here for advantages of
investing in a dividend paying
mutual fund.
Dividends
make a very important part of any investor's portfolio. Dividends
provide an instant cash flow return on your investment and also
act as a downside protector in bear markets. Also, the US stock
markets have lost 2% annualized over the last 10 years. If you were
invested in dividend paying mutual funds during this time, you would
probably have made 5% compounded annual gains. In this article,
we will go over 10 best mutual funds that pay dividends. You should
also make sure your mutual fund investments are well diversified
ranging from high income bond funds, utilities, telecommunications
& real estate dividend paying funds, exposure to high quality
emerging markets companies, Large Cap dividend paying companies
& some exposure to Small caps...(Read
Full)
When
markets go in correction mode like the one we are seeing in gold,
silver & oil prices, other investments such as healthcare go
north because consumers need healthcare & pharmaceutical products
no matter what. The demand for healthcare products & services
remains unaffected from the state of the economy. On top of that,
healthcare companies are some of the highest dividend paying companies
with a cooling effect on dropping share prices. In this article,
we will go over the best
dividend paying mutual funds in the health care sector with
strong management, clear objectives & a disciplined approach
to investing... (Read
Full)
In
the first & second quarters of 2011, the stock markets have
been rallying with the Dow Jones Industrial Average (DJIA) peaking
at 12,810 while the S&P 500 topped 1363 on April 29th, 2011.
However most investors are still cautious as the economic recovery
is still fragile & the pace of growth is slow. Also, concerns
about excessive debts in European countries such as Greece, Portugal,
Spain pose great risks to the markets. This could cause the Euro
to weaken further causing the US dollar to rise, commodities &
oil to plunge & the equity markets in general to go through
a severe correction (5 to 10%). We at Best Dividend Paying Mutual
Funds.com think these risks are valid & do pose a great danger
to investor's portfolios. For this reason, we will outline the top
5 conservative dividend paying mutual funds that also have bond
allocations to limit downside losses in case of a huge market correction.
If you read our article on Why
to Invest in Dividend Paying Mutual Funds, you know that dividends
act as a protector against downward bear markets when stocks across
the entire market tumble... (Read
Full)
Since
the entire concept of this website is about high
yielding dividend mutual funds, investors might also want to
be interested in bond mutual funds that pay high dividends and hold
US Corporate & Government debt. Investing in a bond mutual fund
means i) you will get the services of a qualified professional fund
manager that understands the business and ii) your risk levels will
be diversified because bonds from different sectors of the economy
will be chosen. Here is how bond mutual funds are usually diversified:
Bonds are issued by different levels of government
or municipalities & corporations in different sectors of the
economy.
Bonds mature on different dates, some are short
term bonds while others are long term bonds (5 years or more).
Bonds pay different yields, Corporate bonds
usually pay higher yields than Government bonds.
Just like how analysts like to measure a company's
stock via the price to earnings ratio, price to book ratio, earnings
per share growth, Beta, market capitalization & volume, dividend
mutual funds can also be measured in the same manner.
i) Price to Earnings Ratio (P/E)
The price to earnings ratio of a mutual fund tells
us how expensive this mutual fund is relative to the earnings of
its holdings. Just like a stock's P/E ratio, this metric is important
in determining the valuation of a mutual fund & its net asset
value. A higher P/E ratio means the fund is more expensive while
a lower P/E ratio might suggest the fund is undervalued or it is
having problems earning money for investors. Historically, a price
to earnings ratio greater than 15 suggests a mutual fund might be
expensive while lower than that suggests it is cheaper... (Read
Full)
If
you surf through my favorite Mutual funds research website MorningStar.com,
you will see many mutual funds that have different fee classifications;
No Load, Front End Load, Intial Sales Charge, Low Fee,
etc. In this article, we will go over some common abbreviations
that are used to describe how much fees a mutual fund charges. First
as with any business, running a mutual fund entails expenses including
fees to buy/sell stocks, investment banker fees, marketing
& administrative fees, dividend distribution fees,
etc. Also the mutual fund manager & his analyst team who run
the mutual fund also need to get paid. Mutual funds pass along these
costs to their investors by charging fees & expense ratios.
Investors
love dividend-paying stocks because of the reliability of their
cash flows & stable businesses that will exist well in to the
future. Utility companies, industrial conglomerates & oil &
gas companies fall in to this category. However the run up in technology
stocks in the late 1990s brought negative effects on dividend paying
stocks because investors turned away from them in search of higher
growth technology companies. In fact during the market top in March
2000, the average dividend yield of all companies in the S&P
500 Index fell to just 1.1%. This was versus a historic average
dividend yield of 3%. Since then, tech stocks have tumbled &
dividend paying stocks have become favorable again. In this article,
we will go over why now is a good time to invest in dividend paying
mutual funds... (Read
More)