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Investing Is About Total Return And Not Just Yield

Published Fri, 05 Jul 2019 13:34:11 -0400 on Seeking Alpha

This week, I met with retired investors who owned yield-focused portfolios. These investors truly meant well but were unsure of what it meant to compare total return vs. yield. Investors who have struggled to grow their money in this low interest environment over the past decade have mainly been retirees and savers. Traditional saving bearing products tend to be virtually non-existent with yields on CDs and money markets remaining below inflation. This problem has caused those nearing retirement to reach out the risk spectrum in an attempt to earn more dividend interest to spend in the golden years.
As these retired and yield-hungry investors seek ways to meet their income needs, it is helpful for us on Seeking Alpha to educate clients and retirees on the concepts of both yield and total return. Without breaking client confidentially, I came up with a portfolio that looks just like the two I reviewed this week.
The Yield-Focused Portfolio
When doing this article, I wanted to be fair and independent as much as possible while constructing these two portfolios. The yield-focused portfolio focuses on exchange-traded funds that feature higher than average dividend yields. These securities I found were typically owned in their 401ks, IRAs, and individual cash accounts. While making this portfolio, I followed a specific criteria listed below:
1. The security must be a liquid ETF with over $500 million AUM.
2. The security would be the highest dividend yielding ETF... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
SPDR S&P 500 ETF 297.74   0.0 0.00 5.42 1.80
ISHARES BARCLAYS AGGREGATE BOND FUND  

SPDR S&P 500 ETF - SPY
SPDR S&P 500 ETF - SPY  


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