The fizzling of the FANG stocks has many retirement investors souring on tech stocks. And it’s easy to understand why. Given their “growth” focus, they also come with a hefty dose of volatility. Investors in or near retirement simply can’t handle the potential for big-time losses. There’s only one problem with this thinking.
It’s not entirely true.
Yes, there are plenty of high-flying tech stocks. But you know what there are more of? Tech stocks that are mature enterprises that are just minting cash. Cash that they are increasingly sharing with their investors via rising dividends. Since 2012, tech stocks have managed to increase their dividends by 17.11%. This crushes the rates of dividend growth from traditional dividend sectors like utilities and consumer staples.
What’s more is that the tech sector’s payout ratios are lower and their free cash flow yields are higher, meaning they have much more room to keep the cash hitting investor’s wallets.
That’s exactly what you want if you’re a retirement investor!
With that in mind, here’s one tech stock, one exchange-traded fund and one mutual fund to get your tech game on.