In the universe of dividend stocks, a huge percentage of them pay out on a quarterly basis. Yet there’s a number of monthly dividend stocks out there, too — and there are some particular advantages to getting your payouts on a monthly basis.
If you’re someone who has certain fixed expenses, getting a monthly dividend check you can rely on to pay those expenses can take a load off your mind. If you are retired, having monthly dividend stocks that pay you every 30 days might mean a totally different quality of life. Living on a fixed income often means having to juggle certain consumption behaviors around when that income arrives.
If so, these dividend stocks are for you.
Many of these monthly dividend stocks are actually closed-end funds, which are like mutual funds, but with a few differences. One of the big ones is that, whereas mutual funds take money in and pay money out to investors on a daily basis, a closed-end fund raises a fixed amount of money through an IPO and then trades like a stock.
One word of warning first, though: Most of these are not big-volume stocks, and trade about 50,000 shares per day. Small orders aren’t likely to move the market much, but be aware, and use limit orders and stop-losses when dealing with them.