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Dividend ETF or Dividend Stocks?

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Steve Hodl
@mypathtofire
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1 min read

I invest in both ETFs and single dividend stocks, which do you like best?

Dividend ETF

Positives

  • Saves time, no work to do
  • Automatic rebalancing
  • Strong diversification from the first purchase

Negatives

  • The ETF fees (TER) is usually higher than simple index fund fees

  • No choice over the stocks in the ETF

Dividend Stocks

Positives

  • No administrative fees
  • You can choose which stocks to have in your portfolio
  • More exciting if you like investing

Negatives

  • More time needed to manage the investments
  • Rebalancing regularly order fees
  • Less diversification, especially in the beginning

Summary

Actually, one method is not necessarily better than the other. It mostly depends how much time you want to invest and what your motivation behind investing is.

If you dont want to check the markets daily, then you probably are better off with an ETF. If you have more time and want to maybe save money on ETF fees and choose your own stocks, then maybe the dividend stocks is the right choice.

Thanks for reading.

What is your choice?

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