How to retool your 60/40 portfolio for income generation, per BlackRock
Investment Strategy for Retirement: Investors nearing retirement should consider shifting from traditional balanced portfolios to income-generating assets, such as dividend-paying stocks and higher-yielding bonds, to manage risks associated with market downturns and ensure steady cash flow.
Research Findings: BlackRock's analysis indicates that diversified income-focused portfolios have historically delivered better returns for similar risk levels compared to traditional 60/40 portfolios, highlighting the importance of an income-oriented approach in retirement planning.
Trade with 70% Backtested Accuracy
Analyst Views on VIG
About the author
Two Dividend ETFs That May Excel if Interest Rate Cuts Occur Again in 2026
Federal Reserve Rate Cuts: The Federal Reserve has enacted a rate-cutting cycle over the past two years, with market expectations for additional cuts in 2026, impacting income investors who may turn to equities for yield.
Current Federal Funds Rate: The effective federal funds rate is currently at 3.64%, its lowest since late 2022, with potential implications for fixed income if the next Fed chair nominee, Kevin Warsh, advocates for lower interest rates.
Dividend-Focused ETFs: Investors are increasingly looking at dividend-focused exchange-traded funds (ETFs) like the JP Morgan Equity Premium Income ETF and the NEOS S&P 500 High Income ETF, which have gained popularity due to their reliable income generation.
Performance of Dividend ETFs: The SCHD and VIG ETFs have shown strong performance, with SCHD yielding 3.32% and VIG yielding 1.57%, appealing to investors seeking stable and growing cash flow amidst market volatility.
3 Defensive Dividend ETFs to Mitigate a Possible Market Decline
Market Performance: The S&P 500 has experienced three consecutive years of double-digit returns, indicating a strong market performance during this period.
Investment Strategy: Dividend investors are encouraged to explore strategies that can provide more downside protection for their portfolios in light of potential market fluctuations.
Dividend Funds Decline as Trump Aims at Defense Stock Distributions
- Trump's Economic Claims: President Donald Trump frequently highlights record stock prices as evidence of his economic success.
- Critique of Dividends: Recently, he criticized dividends, which are a significant contributor to stock market returns.
VIG vs. VYM: Which Vanguard Dividend ETF Is the Superior Investment?
Vanguard ETFs Overview: The Vanguard Dividend Appreciation ETF (VIG) focuses on long-term dividend growth stocks, while the Vanguard High Dividend Yield ETF (VYM) targets stocks with above-average yields, making them popular choices for conservative dividend stock exposure.
Performance Comparison: VYM offers a higher yield of 2.4% compared to VIG's 1.6%, and in a weakening economic environment, VYM's value-oriented nature may provide better performance due to its lower price-to-earnings ratio.
Sector Allocations: VIG has a significant allocation to technology (27.8%), which may pose risks if investor confidence declines, while VYM is more diversified across sectors, including financials and industrials, making it appear more traditional for dividend funds.
Current Preference: Given the current economic outlook and labor market challenges, the author prefers the Vanguard High Dividend Yield ETF (VYM) over the Vanguard Dividend Appreciation ETF (VIG) for its potential to outperform in a slowing economy.
Top Dividend ETFs to Consider: SCHD Offers High Yield, While VIG Emphasizes Dividend Growth
Comparison of Dividend ETFs: The Vanguard Dividend Appreciation ETF (VIG) and Schwab U.S. Dividend Equity ETF (SCHD) are leading dividend-focused ETFs, with VIG offering broader diversification and a focus on dividend growth, while SCHD provides a higher dividend yield and targets high-yielding stocks.
Performance and Yield: SCHD boasts a dividend yield of 3.8%, significantly higher than VIG's, appealing to income-focused investors, whereas VIG emphasizes long-term dividend growth, potentially leading to better total returns over time.
Portfolio Characteristics: SCHD has a concentrated portfolio with a focus on sectors like energy and healthcare, while VIG includes a larger number of holdings with a tilt towards technology and large-cap firms known for consistent dividend increases.
Investment Strategy Insights: Investors should consider their priorities—whether they seek immediate income through high yields or long-term growth through stable dividend increases—when choosing between these two ETFs.
5 Vanguard ETFs to Invest in and Hold for Future Generations
Vanguard's Investment Offerings: Vanguard is recognized for its extensive range of ETFs, making it a strong choice for long-term investors seeking diversified, low-cost investment options, particularly in large-cap and growth stocks.
Top ETFs for Long-Term Investment: The Vanguard S&P 500 ETF and Vanguard Total Stock Market ETF are highlighted as ideal long-term holdings due to their potential for capital growth, with the latter providing broader market exposure.
Growth and Dividend Strategies: The Vanguard Growth ETF focuses on high-potential growth companies, while the Vanguard Dividend Appreciation ETF targets established firms with a history of increasing dividends, offering stability and consistent returns.
Importance of Bonds: Despite the focus on equities, the Vanguard Total Bond Market ETF is emphasized for its role in providing income, stability, and diversification within a long-term investment portfolio.
Two Dividend ETFs That May Excel if Interest Rate Cuts Occur Again in 2026
Federal Reserve Rate Cuts: The Federal Reserve has enacted a rate-cutting cycle over the past two years, with market expectations for additional cuts in 2026, impacting income investors who may turn to equities for yield.
Current Federal Funds Rate: The effective federal funds rate is currently at 3.64%, its lowest since late 2022, with potential implications for fixed income if the next Fed chair nominee, Kevin Warsh, advocates for lower interest rates.
Dividend-Focused ETFs: Investors are increasingly looking at dividend-focused exchange-traded funds (ETFs) like the JP Morgan Equity Premium Income ETF and the NEOS S&P 500 High Income ETF, which have gained popularity due to their reliable income generation.
Performance of Dividend ETFs: The SCHD and VIG ETFs have shown strong performance, with SCHD yielding 3.32% and VIG yielding 1.57%, appealing to investors seeking stable and growing cash flow amidst market volatility.
3 Defensive Dividend ETFs to Mitigate a Possible Market Decline
Market Performance: The S&P 500 has experienced three consecutive years of double-digit returns, indicating a strong market performance during this period.
Investment Strategy: Dividend investors are encouraged to explore strategies that can provide more downside protection for their portfolios in light of potential market fluctuations.
Dividend Funds Decline as Trump Aims at Defense Stock Distributions
- Trump's Economic Claims: President Donald Trump frequently highlights record stock prices as evidence of his economic success.
- Critique of Dividends: Recently, he criticized dividends, which are a significant contributor to stock market returns.
VIG vs. VYM: Which Vanguard Dividend ETF Is the Superior Investment?
Vanguard ETFs Overview: The Vanguard Dividend Appreciation ETF (VIG) focuses on long-term dividend growth stocks, while the Vanguard High Dividend Yield ETF (VYM) targets stocks with above-average yields, making them popular choices for conservative dividend stock exposure.
Performance Comparison: VYM offers a higher yield of 2.4% compared to VIG's 1.6%, and in a weakening economic environment, VYM's value-oriented nature may provide better performance due to its lower price-to-earnings ratio.
Sector Allocations: VIG has a significant allocation to technology (27.8%), which may pose risks if investor confidence declines, while VYM is more diversified across sectors, including financials and industrials, making it appear more traditional for dividend funds.
Current Preference: Given the current economic outlook and labor market challenges, the author prefers the Vanguard High Dividend Yield ETF (VYM) over the Vanguard Dividend Appreciation ETF (VIG) for its potential to outperform in a slowing economy.
Top Dividend ETFs to Consider: SCHD Offers High Yield, While VIG Emphasizes Dividend Growth
Comparison of Dividend ETFs: The Vanguard Dividend Appreciation ETF (VIG) and Schwab U.S. Dividend Equity ETF (SCHD) are leading dividend-focused ETFs, with VIG offering broader diversification and a focus on dividend growth, while SCHD provides a higher dividend yield and targets high-yielding stocks.
Performance and Yield: SCHD boasts a dividend yield of 3.8%, significantly higher than VIG's, appealing to income-focused investors, whereas VIG emphasizes long-term dividend growth, potentially leading to better total returns over time.
Portfolio Characteristics: SCHD has a concentrated portfolio with a focus on sectors like energy and healthcare, while VIG includes a larger number of holdings with a tilt towards technology and large-cap firms known for consistent dividend increases.
Investment Strategy Insights: Investors should consider their priorities—whether they seek immediate income through high yields or long-term growth through stable dividend increases—when choosing between these two ETFs.
5 Vanguard ETFs to Invest in and Hold for Future Generations
Vanguard's Investment Offerings: Vanguard is recognized for its extensive range of ETFs, making it a strong choice for long-term investors seeking diversified, low-cost investment options, particularly in large-cap and growth stocks.
Top ETFs for Long-Term Investment: The Vanguard S&P 500 ETF and Vanguard Total Stock Market ETF are highlighted as ideal long-term holdings due to their potential for capital growth, with the latter providing broader market exposure.
Growth and Dividend Strategies: The Vanguard Growth ETF focuses on high-potential growth companies, while the Vanguard Dividend Appreciation ETF targets established firms with a history of increasing dividends, offering stability and consistent returns.
Importance of Bonds: Despite the focus on equities, the Vanguard Total Bond Market ETF is emphasized for its role in providing income, stability, and diversification within a long-term investment portfolio.
