If you want to add some safety for your portfolio, you might normally look at silver and gold as possible ways to diversify and reduce your risk. But given how volatile their prices have been in recent months, there's clearly a great deal of speculation going on involving these traditionally safe assets.
When there's a high degree of speculation involved in a stock or asset, that increases your overall risk, because it can be much more difficult to predict which direction it will go in. That's why, for risk-averse investors, buying silver or gold may not be an ideal option right now.
Instead, what you may want to consider is investing in a diversified exchange-traded fund (ETF) that can provide you with stability and plenty of dividend income. An ETF that checks off those boxes is the iShares Core High Dividend ETF (HDV 0.13%).
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The iShares fund focuses on high-quality dividend stocks
What's great about the iShares fund is that it doesn't simply invest in high-yielding dividend stocks; it focuses on ones that have strong financial health. This can give you confidence in knowing that the stocks within the fund have sustainable payouts that aren't too risky or due for a cut anytime soon.
The ETF has around 75 stocks, which suggests it is highly selective in the dividend stocks it chooses for its portfolio. And a quick look at its portfolio confirms that it contains some of the best dividend stocks in the world, including ExxonMobil, AbbVie, and Coca-Cola. With these types of quality stocks, this is an ETF that you won't have to worry about.
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The ETF is a great option for the long term due to its high yield and low fees
Currently, the iShares ETF yields right around 3%, which is nearly three times the rate of what the S&P 500 averages (1.1%). And its expense ratio of 0.08% is also incredibly light. On a $10,000 investment, you'd be paying just $8 in fees per year. While it would rise over time as the value of your investment goes up, it's a nominal amount given how much you'd be collecting in dividends. When it comes to long-term investing, it's important to keep fees as low as possible to ensure that they aren't eating into your returns, as they can add up significantly over time.
Between a high yield, low fees, and some quality dividend stocks in its portfolio, the iShares Core High Dividend ETF can be the ultimate no-brainer option for long-term investors who want to reduce their risk in the markets, not only this year, but also over the long haul.
