Alright dividend investing community! I do not know about you, but my seat-belt is strapped and clicked in, as we have been in and will be in for a bumpy ride this year. The stock market has soared to new all-time highs in the earlier parts of 2022, just to fall over 500 points this year, with ups & downs in between.
As a dividend investor, it’s hard to keep up with all of the investing opportunities, especially with demanding jobs and constant volatility, where your dividend stocks can be undervalued one day and overvalued the next.
Therefore, I have ADDED a new strategy to my family’s investment plan. We are investing $50 a day into Vanguard’s S&P 500 ETF (VOO)! Dive in to check it out and see the results so far!
What is Vanguard’s VOO?
Vanguard’s VOO is an S&P 500 ETF, aka it is the entire top 500 stocks that are within the S&P 500. VOO is a passive investment, with a 0.03% expense ratio, which means you pay approximately $0.30 per $1,000 invested into VOO. The S&P 500 has returned over 9% on average over the last 40-50+ years. It’s hard to beat the market consistently, no doubt.
How about the dividend of VOO? The dividend yield, based on the trailing 4 quarters is approximately 1.42%, at the time of this writing (April 22, 2022). In addition, the dividend growth rate, based on comparing the last 4 trailing 4 quarters, is approximately 6%.
The ETF has been around since 2010, so going on for 12 years. VOO has over $290 billion in total assets, aka this is a massive Vanguard ETF. The top 10 holdings contain the biggest names out there, such as Amazon (AMZN), Apple (AAPL), Microsoft (MSFT) and Tesla (TSLA). See the top 10 chart here:
I don’t need to explain too much more here. Buying the big guys, buying the basket. Now… what’s the strategy and why?
Vanguard VOO Investing strategy
The strategy was implemented back on April 11th, 2022. I began investing this way, to also make sure I was staying invested with the ENTIRE stock market, as it’s been extremely difficult to build any single position. For instance, with the cash I had a few weeks back, I was able to buy 1 share of Anthem (ANTM) at $430. Fast forward to present day, that same dividend stock is now trading over $500 per share. What. The. Heck.
The dividend investing and investing community knows I’ve been buying Vanguard’s High Dividend Yield ETF (VYM) weekly, 2 shares each for mine and my wife’s dividend stock portfolio. That dividend investing strategy isn’t stopping… however, I want to put as much money to work, as often as possible, without thinking, without emotion.
Introducing the Vanguard S&P 500 (VOO) strategy. Here is a screen shot of the VOO buys. I may have added in extra $50 investments, when there were dips that happened, such as the one we just experienced on Friday, April 22nd.
How am I able to buy Vanguard’s VOO on a daily basis? Through the SoFi Investment App – as I can set a weekly buy on each day of the week. I love the application and full financial service platform they have. I highly recommend (if you do happen to sign up, you receive a free share of stock I believe)!
Therefore, I may end up transitioning more to the SoFi investing app at some point, as well, in the future. They have better rates on their savings accounts (at 1.25% currently) and their platform is just so simple and easy to use. I love it!
Back to Vanguard VOO, though. Adding $250 per week at 1.42% adds $3.55 per week in dividend income. Once you annualize that out, you are at approximately $185 in forward dividend income added. All about that passive income baby!
Vanguard Investing Conclusion
Therefore, not only are we investing around $450 per week into Vanguard High Dividend Yield ETF (VYM), but we are now adding in at least $250 per week into Vanguard’s S&P 500 ETF (VOO). In total, that is $700 per week, NO MATTER WHAT, right then and there. That will end up being over $36,000 invested per year, which obviously is taken up a significant amount of what we are able to save.
That’s OKAY though. We will still be able to save a little bit, plus side hustling, in order to buy individual, undervalued dividend stocks. If I can find a way to make sure I invest another $14,000+ to round out $50,000 into dividend investing, that would be incredible.
My question to YOU the reader is… what do you think of this VOO strategy? Would you consider investing into VOO each day? Are you buying other dividend stocks on a routine basis, regardless of price? Let me know in the comments.
Thanks again for stopping by, good luck and – as always – happy investing!
-Lanny