Get More Than Double The Market's Dividend With This Stock Play – Investor's Business Daily

Stocks rose Wednesday ahead of the Fed’s decision as Caterpillar (CAT), Nike (NKE) and Apple (AAPL) boosted the Dow Jones industrial average to a new high.

X SPDR Dow Jones Industrial Average (DIA) and PowerShares QQQ Trust (QQQ) gained 0.3% each, while SPDR S&P 500 (SPY) added 0.2%. Emerging markets outperformed with iShares MSCI Emerging Markets (EEM) up 0.9%.

Apple rose 0.7%. It’s extended from a 160.97 cup-with-handle buy point. The iPhone maker announced a $390 million investment in Finisar (FNSR), a laser sensor supplier.

Gold miners, telecom and retail led the upside among sector funds in the stock market today. Energy and banks lagged.

Bitcoin Investment Trust (GBTC) vaulted 10% to a new record high as the cryptocurrency’s price rose to as high as $17,384.56 earlier and was recently trading just below the $17,100 level.

The Fed is widely expected to raise interest rates by a quarter percentage point when it announces its monetary policy decision at 2 p.m. ET.

Double Your Dividends?

If you miss a buy opportunity the first time, a second one could be lurking just around the corner.

First Trust Dow Jones Global Select Dividend (FGD) set up a chance to buy shares on Thursday as it bounced off its 50-day moving average. It’s still in potential buy range from the rebound. But it’s also close to a 26.20 cup-base entry, which sets up another opportunity. The ETF has made small gains in between some of the bases it’s cleared as it advances along the 50-day line.The $497.7 million fund, which tracks the Dow Jones Global Select Dividend Index, marked its 10th anniversary last month. To be considered for inclusion in the index, companies must pay a current dividend, have a current-year dividend-per-share ratio greater than or equal to its five-year average ratio, and have a five-year average payout ratio of 60% or less for U.S. and European companies and 80% or less for all other countries. They must also have a three-month daily average trading volume of at least $3 million.

The resulting stocks are ranked by dividend yield. The top 100 highest-yielding stocks make the index. Weightings for individual holding are capped at 10%.

Greater Europe accounted for nearly 50% of assets, with the U.K. making up about 14% of that, according to Morningstar Direct. North America and Greater Asia represented roughly 25% each. FGD’s top holdings as of Dec. 11 included Waddell & Reed Financial (WDR), Guess (GES) and Royal Dutch Shell (RDSA). Finland’s Fortum, the U.K.’s easyJet and France’s Natixis are also among its biggest holdings.


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The fund’s year-to-date return of 15.7% through Dec. 12 trails the S&P 500’s 21.1% gain. Its average annual returns over the longer haul also lag the benchmark index. But its 3.9% annualized dividend yield is well above the S&P 500’s average 1.8% payout.

The ETF carries a 0.58% expense ratio.

Tuesday’s pick, iShares MSCI EAFE (EFA), remains in potential buy range from a recent rebound off its 50-day line.

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