AI stocks started to lose steam near the end of 2024 and investors are preparing for what could be a year of slow growth. In its 2025 outlook, T. Rowe Price said the global economy could slow down in the new year amid growth headwinds in China and the impact of higher interest rates.
Dividend stocks could be a good option for investors looking for stability and consistent income. Let’s examine a case study of an investor who reached a decent dividend income milestone thanks to patience and wise picks.
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Last month, a dividend investor shared his income report and investing journey on r/Dividends, a community of over 645,000 income investors. The investor said he was 25 and had been investing since 14. The portfolio screenshots publicly shared by the investor showed his annual dividend income was $10,467 or about $872 per month. His overall portfolio yield was about 3.6%. During the discussion on his post, the investor said his total portfolio was $291,000.
“It took me a long time and a lot of saving up. I also got lucky with a small inheritance that I put directly into retirement,” he said.
The investor said he gained more “steam” after selling some stocks for “growth opportunities.”
“Not a bad idea to do both dividends and growth stocks, but my portfolio is mainly growth with income.”
Let’s examine some of the portfolio’s top holdings based on the information the investor shared publicly.
The Vanguard S&P 500 ETF (VOO) was among the biggest positions of the investor, earning $10,467 in dividends annually. VOO is one of the best ways to gain exposure to the broader U.S. market and earn steady dividend income. The fund gained about 24% in 2024.
Baird Aggregate Bond Fund
The Baird Aggregate Bond Fund (BAGIX) was among the top holdings in the portfolio. The mutual fund primarily invests in high-quality, investment-grade bonds. According to Benzinga Pro, it pays monthly and has a yield of about 3.8%.
Blackstone Mortgage Trust
Blackstone Mortgage Trust (BXMT) is a high-yield dividend stock in the investor’s portfolio that collected $10,467 per year in dividends. According to Benzinga Pro, the mortgage REIT has a yield of just over 10%. In October, the company reported third-quarter earnings ahead of Wall Street estimates.
The Causeway International Value Fund (CIVIX) invests in companies trading in developed countries outside the U.S. Some of the fund’s biggest holdings include French manufacturing company Alstom SA, the UK’s Barclays, South Korea’s Samsung Electronics and Japan’s Renesas Electronics.
iShares MSCI EAFE ETF
The iShares Core MSCI EAFE ETF (IEFA) tracks an index consisting of large, mid- and small-cap companies from developed markets outside of the U.S. and Canada. The fund has a dividend yield of about 3%. Some of the fund’s top holdings include ASML, NOVO NORDISK, SAP, NESTLE and Toyota, among many others.
The Schwab Target Index Fund 2060 (SWYNX) is a target-date mutual fund for investors planning to retire by 2060. The fund seeks capital appreciation and income and has about $775 million in assets. Schwab U.S. Large-Cap ETF, Schwab International Equity ETF, Schwab Emerging Markets Equity and Schwab U.S. REIT ETF are among the fund’s biggest holdings.
Schwab U.S. Dividend Equity ETF
The investor making $10,467 per year in dividends said Schwab U.S. Dividend Equity ETF (NYSE:SCHD) was also a part of his portfolio. The ETF tracks the Dow Jones U.S. Dividend 100 Index and exposes you to some of the top dividend stocks trading in the U.S., including Home Depot, Coca-Cola, Verizon, Lockheed Martin, Pepsi and AbbVie, among many others.
JPMorgan Nasdaq Equity Premium Income ETF
JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) is a high-yield covered call ETF that distributes monthly dividend income. The ETF invests in Nasdaq companies and generates extra income by selling call options. It has a dividend yield of over 9%.
The changing interest rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider.
For instance, the Ascent Income Fund from EquityMultiple targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000. Benzinga Readers: Earn a 1% return boost on your first EquityMultiple investment when you sign up here (accredited investors only).
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