Paul Meisel

Dividend-Focused ETFs vs. Alternative Portfolios: The Risk Of Over-Diversification

Geoff, I just wanted to thank you for the lasting usefulness of this article. I am generally in agreement with your conclusions (partly as a result of your writings and partly due to other research).

My portfolio is diversified between 15 to 20 positions of mostly dividend paying stocks, with no ETFs -- but I cam back across this article today while working on a beginning portfolio for my son. Investing $1500-$2500 per year in $500 chunks, it is very difficult to diversify him in stocks, and I see a definite utility here.

A Close Look at the Claymore/Zacks Yield Hog ETF

It seems it will attract some favorable attention just because of the limited offerings in the "dividend" space, particularly due to the high yield which should put a floor under the downside. I would be more comfortable with a better description of their methodology, though. This seem less like an index fund than a formula-constructed portfolio -- possibly similar but not the same thing.