Dividend investing can make you rich, but investing in stocks is a quick fix for the market jitters. Here are some thoughts to think about and some dividend ETFs and stocks to buy.

Dividend investing is not a strategy where you can double or triple your money over night, but you can beat the market over the long run and become wealthy. It may take you 15 or 20 years, but do not despair. Think of it this way: don’t you wish you had such a strategy going 20 years ago? Time evaporates faster than water, so do what you think is best now.

The usual approach is to choose equities that have an excellent record of dispersing dividends to its shareholders and then magnify that return through an automatic reinvestment program.

The real key is to continue buying stocks or funds that deliver dividend yields around 4 or 5 percent or better, and let the contributions and dividends multiply over time. Thus, the returns compound themselves and your money makes more money. The ideal dividend yield should be better than the current rate of inflation.

Dividend investing is a great program for those who have other things (aside from investment research) they want to do. If you choose the best companies to start with, you don’t have to worry much about market fluctuations

There are excellent ETFs that hold stocks that routinely generate good dividends.

Two that are at the top of my list are iShares Dow Jones Select Dividend Index (Ticker: DVY) and its main rival PowerShares High Yield Dividend Achievers (Ticker:PEY).

The iShares Index looks for 100 stocks in the Dow Jones U.S. Total Market Index that have increased their dividends progressively over the last five years without cutting or eliminating a single payment. 

The concept of ETF providers loading up on ETF with superior stocks is a good one. It increases your average success by exposing you to stocks that have proved their performance, and cuts your risk by giving you a lot of diversity.

The PowerShares Index bases its dividend returns on the 50 highest dividend paying stocks from the Mergent’s Dividend Achievers. These stocks have increased their dividends in each of the last ten years and have been considered the best in the business for a long time

There are overlaps among the stocks of the two ETFs. There are eight dividend stocks that appear over and over in ETFs that offer dividends, making it a little more difficult to make a choice among these.

The PowerShares High Yield Dividend Achievers ETF (Ticker: PEY) is more concentrated; relying on only fifty stocks, and thus is slightly more volatile and thus slightly more risky than iShares Dow Jones Select Dividend Index ETF (Ticker: DVY).

The recent returns are 3.0% for the iShares ETF and 2.4% for the PowerShares ETF. The expense ratio, incidentally, is cheaper for the iShares ETF.

Given what I’ve told you, if you are a conservative investor DVY is for you, but if you can take a little more risk for a better return consider PEY for your pick. In any case, both ETFs are fine and account for most of the flow of investor money into ETF dividend funds.

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