Dear Diary,
Let me be perfectly clear: I am not a fan of fairy tales. Dividend-paying stocks, however, seem to be the financial world’s version of Cinderella. Everyone loves a story where cash flows reliably, management showers you with pennies, and no one has to explain why the pumpkin turned into a carriage. But here’s the thing-just because a company can afford to hand out dividends today doesn’t mean it won’t suddenly decide to shrink them tomorrow. Like a prince who vanishes mid-ball, leaving you with a glass slipper and a sinking feeling.
Units of Patience Lost: 3. Hours Spent Googling “Are Dividends Magic?”: 4. Number of Times I’ve Forgotten That Past Performance ≠ Future Wealth: Countless.
Still, the Hartford Funds have a point: “Since 1960, 85% of the S&P 500’s total return came from reinvested dividends.” Sounds impressive until you remember that 85% of *anything* is just a fancy way of saying “most of it.” But hey, who am I to argue with numbers that rhyme?
Units of Skepticism Activated: 1. Hours Spent Questioning the Math: 0. (Math is scary.)
So, what’s a weary investor to do? Hunt for dividend darlings like a modern-day Goldilocks? Or just let someone else do the legwork? Enter the Vanguard Dividend Appreciation ETF (VIG), the financial world’s version of a ready-made cocktail-low effort, slightly bitter, and with a 0.05% annual fee. For $10,000 invested, that’s just $5 to feel smug about your passive income.
Units of Smugness Achieved: 0.5. Hours Spent Pretending I Understand Expense Ratios: 1.5.
Meet the Vanguard Dividend Appreciation ETF
VIG’s performance? Let’s call it… respectable. Over 3 years: 16.01%. Over 5 years: 12.69%. Over 10 years: 13.24%. Over 15 years: 12.79%. That’s like a polite guest at a party-never the life of it, but never the one who spills wine on the carpet.
Units of Envy Directed at S&P 500: 2. Hours Spent Wondering If “Respectable” Is Code for “Boring”: 3.
| Over the Past… | Average Annual Gain |
|---|---|
| 3 years | 16.01% |
| 5 years | 12.69% |
| 10 years | 13.24% |
| 15 years | 12.79% |
But here’s the kicker: VIG’s dividend yield (1.7%) edges out the S&P 500’s 1.2%. Just don’t get too cozy with that extra 0.5%-history has a habit of reminding you that “yield” and “guarantee” are not synonyms.
Units of Comfort Derived from “Edges Out”: 0. Hours Spent Remembering 2008: 2.
VIG’s secret sauce? The S&P US Dividend Growers Index-companies that’ve hiked dividends for at least 10 years. That’s like joining a club where the only rule is “Don’t let your payouts stall.” But let’s be real: Dividend growth is a marathon, not a sprint. And marathons are for people who don’t panic at the 26th mile.
Units of Confidence in Marathon Metaphor: 0. Hours Spent Wondering If This ETF Has a Sprint Mode: 1.
Check out the dividend payments:
| Dividend Paid | Dividend Amount |
|---|---|
| March 27, 2025 | $0.938 |
| March 21, 2022 | $0.694 |
| March 28, 2019 | $0.51 |
| March 21, 2016 | $0.41 |
| March 22, 2013 | $0.288 |
Tripled in 12 years? Impressive. But remember: That’s the past. The future? A blank page and a lot of caffeine-fueled guesswork.
Units of Hope Invested in the Future: 0. Hours Spent Checking “Tripled” Math: 0.5.
What’s in the Vanguard Dividend Appreciation ETF?
Top holdings include Broadcom, Microsoft, JPMorgan Chase, Apple, and ExxonMobil. A glittering array of corporate titans! But let’s dissect this with the precision of a sleep-deprived analyst:
| Stock | Recent Yield | Weight in ETF |
|---|---|---|
| Broadcom | 0.65% | 5.94% |
| Microsoft | 0.64% | 4.82% |
| JPMorgan Chase | 1.81% | 4.04% |
| Apple | 0.44% | 3.74% |
| Eli Lilly | 0.80% | 2.76% |
| Visa | 0.70% | 2.69% |
| ExxonMobil | 3.52% | 2.38% |
| Mastercard | 0.52% | 2.33% |
| Johnson & Johnson | 2.93% | 2.04% |
| Walmart | 0.91% | 2.01% |
Low yields, but fast-growing companies? It’s the financial equivalent of choosing between a cozy blanket and a firework. Which will keep you warm? Which will blow up in your face? The answer: Both. Eventually.
Units of Clarity Gained from This Analogy: 0. Hours Spent Worrying About Fireworks: 1.
Broadcom’s 10-year dividend growth rate? A dizzying 30%. Meanwhile, most companies settle for a polite 1-2% nudge. But growth at any cost is a seductive trap. Remember: A company can’t grow dividends forever unless it’s a black hole siphoning the universe’s wealth.
Units of Faith in Black Holes: 0. Hours Spent Googling “Can Dividends Be Infinite?”: 0.5.
And if VIG isn’t your cup of tea, there’s always the Schwab U.S. Dividend Equity ETF (SCHD). It’s like the Switzerland of dividend funds-balancing yield and growth with the grace of a diplomat. But let’s not get distracted. We’re here to question, not to choose.
Units of Distraction Avoided: 1. Hours Spent Comparing ETFs to Countries: 0.5.
Is the Vanguard Dividend Appreciation ETF a good buy now?
Should you buy VIG? If you crave dividend income that grows “at a solid rate,” then yes. But here’s the rub: Timing the market is a fool’s errand. Unless you’re a fool. Or a gambler. Or someone who believes in “incremental investing” as a shield against regret.
Units of Regret Already Imagined: 12. Hours Spent Typing “What If?” into Google: 6.
So, if tariffs, inflation, or your neighbor’s stock tips have you quaking, consider buying VIG in dribs and drabs. It’s the financial equivalent of eating your broccoli one bite at a time. Less guilt. More denial.
Units of Broccoli Eaten: 0. Hours Spent Denying I Need Broccoli: 100.
Yours in cautious optimism (and a healthy dose of sarcasm),
A Market Skeptic Who Still Checks the News 😐
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2025-09-20 18:34